Wall Street heads for lower open on economic woes

[February 02, 2009]  NEW YORK (AP) -- Wall Street is heading for another tumble Monday, with investors nervous about government gridlock and a new round of economic data.

The stimulus package that passed through the House last week is now headed to the Senate, and Senate Republican leader Mitch McConnell said Sunday the bill backed by President Barack Obama and congressional Democrats could be defeated if it's not stripped of what Republicans deem as unnecessary spending.

Investors are also worried that a "bad bank" plan has not yet emerged from the White House. Such a plan would allow the government to take the riskiest assets off of banks' books and put them into a government-controlled entity.

The Dow Jones industrial average and the Standard & Poor's 500 index are coming off their worst January ever, each dropping more than 8 percent during the month.

Investors have had little reason to buy back into the market, with corporate earnings and economic data coming in poor. On Monday, Wall Street will be focusing on data on personal income and spending; construction spending; and the manufacturing sector. Trading is likely to be fractious as investors also await the government's January jobs report, due Friday morning.

Among earnings toy maker Mattel Inc. said its fourth-quarter profit skidded 46 percent, well below analysts' expectations, as the recession curbed consumer spending.

Ahead of the market's open, Dow Jones industrial average futures fell 109, or 1.37 percent, to 7,846. Standard & Poor's 500 index futures fell 13.20, or 1.60 percent, to 809.30, while Nasdaq 100 index futures fell 21.50, or 1.82 percent, to 1,157.75.

The indexes have fallen for four straight weeks. The Dow closed last week down 0.90 percent, the S&P fell 0.70 percent, and the Nasdaq composite index lost 0.10 percent.

Early Monday, bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.79 percent from 2.85 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.24 percent from 0.22 percent.

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

Light, sweet crude fell $1.32 to $40.36 a barrel in premarket electronic trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average fell 1.50 percent. In midday trading, Britain's FTSE 100 fell 1.97 percent, Germany's DAX index fell 2.31 percent, and France's CAC-40 fell 2.63 percent.

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On the Net:

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

Nasdaq Stock Market: http://www.nasdaq.com/

[Associated Press; By MADLEN READ]

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