Stock futures lower as investors watch earnings

[October 22, 2008]  NEW YORK (AP) -- Wall Street headed for a lower open Wednesday as investors again shifted their focus away from improving credit markets and fixated on corporate earnings that are raising worries about a deep and protracted recession.

While reduced strains in world credit markets have eased some investors' nervousness about the economy, however, market anxiety remains high as hundreds of companies this week release third-quarter earnings and in some cases fourth-quarter forecasts that offer a glimpse of the rough conditions that may lay ahead.

Analysts have warned that the market will see a stretch of volatile sessions as Wall Street recovers from this month's huge drop. Among the companies reporting Wednesday were Amazon.com Inc., AT&T Inc., Boeing Co., McDonald's Corp. and Merck & Co.

Ahead of the market's open, Dow Jones industrial average futures fell 126, or 1.39 percent, to 8,909. On Tuesday, the Dow retreated 231 points after forecasts from DuPont Co., Sun Microsystems Inc. and Texas Instruments Inc. raised fears that companies' outlooks for the fourth quarter and beyond could signal a severe economic downturn.

The Standard & Poor's 500 index futures fell 15.60, or 1.63 percent, to 943.70, and the Nasdaq 100 index futures fell 8.75, or 0.68 percent, to 1,283.75.

Meanwhile, credit markets remained tight but still significantly improved from last week. Demand for Treasury bills, regarded as the safest assets around, grew slightly compared to the previous day as economic worries led investors to shun risky assets in favor of government bonds.

The three-month Treasury bill yielded 1.05 percent, down slightly 1.07 percent late Tuesday. The levels are a notable improvement from the 0.20 percent seen last Wednesday, when investors were willing to take the slimmest of returns in exchange for a safe place to keep their money.

The dollar was higher against other major currencies, while gold prices fell.

Light, sweet crude fell $2.46 to $69.72 a barrel in premarket electronic trading on the New York Mercantile Exchange. On Tuesday, prices fell to $70.89 as a stronger dollar dented demand for commodities and overshadowed worries about a planned OPEC output cut.

Overseas, Japan's Nikkei stock average fell 6.79 percent. Britain's FTSE 100 was down 1.90 percent, Germany's DAX index fell 3.10 percent, and France's CAC-40 was down 2.24 percent.

[Associated Press; By STEVENSON JACOBS]

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.