US stocks set to open mixed ahead of retail sales

[October 15, 2008]  NEW YORK (AP) -- Wall Street headed for a mixed open Wednesday ahead of some key reports on retail sales and bank earnings that could show investors how badly the financial crisis is slamming the broader economy.

The Commerce Department is expected to report that retail sales fell in September from the previous month by 0.7 percent, according to economists surveyed by Thomson/IFR. Meanwhile, two major banks that have snapped up weaker players as a result of the mortgage bust -- JPMorgan Chase & Co. and Wells Fargo & Co. -- reveal their third-quarter results.

JPMorgan, which bought the assets of failed bank Washington Mutual Inc. late last month, is forecast to post a loss, and Wells Fargo, which recently bought Wachovia Corp., is predicted to report a profit. Both reports should offer some insight into the severity of the deterioration in U.S. consumer credit.

On Tuesday, for the first time in nine sessions, the Dow Jones industrial average did not finish the day with a triple-digit loss or gain. Instead, after swinging erratically throughout the session, the blue-chip index closed the day down 76 points following Monday's record 936-point advance.

Ahead of the market's open Wednesday, Dow futures fell 92, or 0.98 percent, to 9,270. Standard & Poor's 500 index futures fell 7.30, or 0.73 percent, to 995.00, and Nasdaq 100 index futures rose 6.75, or 0.49 percent, to 1,372.75.

Late Wednesday, Intel Corp., the world's largest maker of PC microprocessors, beat analysts' estimates and posted a third-quarter profit increase of 12 percent.

The stock market has been catching its breath from a dismal week on Wall Street that erased about $2.4 trillion in shareholder wealth and brought the Dow to its lowest level since April 2003. The tumble occurred amid a seize-up in lending stemming from a lack of trust among institutions in response to the bankruptcy of investment bank Lehman Brothers Holdings Inc. and the failure of thrift bank Washington Mutual Inc.

The credit markets have been showing signs of recovery, but they are far from healthy, and demand for safe assets remains extremely high. The three-month Treasury bill on Wednesday was yielding 0.34 percent, only marginally higher than 0.30 percent on Tuesday. When yields are low, it shows that demand is so high that investors are willing to earn meager returns as long as their principal is preserved.

In other economic data Wednesday, the Labor Department is reporting on producer prices, and in other earnings data, Coca-Cola Co. and Abbott Laboratories release their third-quarter results.

In Asian trading, Hong Kong's Hang Seng Index lost nearly 5 percent after rising more than 13 percent the previous two days. Markets in Australia, South Korea, China, India and Singapore also sank. Japan's Nikkei 225 index, however, ended up 1.1 percent at 9,547.47 after soaring 14 percent in the previous session.

In morning trading in Europe, Britain's FTSE 100 fell 3.24 percent, Germany's DAX index fell 2.63 percent, and France's CAC-40 fell 2.59 percent.

Crude oil fell 61 cents to $78.02 a barrel in premarket electronic trading on the New York Mercantile Exchange. The dollar fell against other major currencies.

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On the Net:

New York Stock Exchange: http://www.nyse.com/

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[Associated Press; By MADLEN READ]

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