Stock futures point toward lower opening

[June 09, 2009]  NEW YORK (AP) -- Stock futures fell slightly Tuesday morning, pointing to a lower opening on Wall Street as investors await word on which banks might be able to repay government loans and as a Supreme Court justice issued a halt to Chrysler's pending sale.

The government is expected to announce as early as Tuesday morning which of the nation's largest banks can repay government bailout loans provided to the sector last fall. Goldman Sachs Group Inc., JPMorgan Chase & Co. and American Express Co. are among the banks expected to get the go ahead to repay the loans.

Experts have said such repayments show some stability has returned to the banking sector, which was thrown into chaos last fall with the collapse of Lehman Brothers. However, by granting only some banks the ability to return funds, they caution it could create also a tiered banking system with some large firms still tied to the government bailout having to figure out how to compete with those no longer connected to the loans.

The government loans come with certain caveats such as restrictions on executive compensation.

Ahead of the market's opening Tuesday, Dow Jones industrial average futures declined 22, or 0.25 percent, to 8,737. Standard & Poor's 500 index futures fell 2.20, or 0.23 percent, to 936.60, while Nasdaq 100 index futures declined 1.75, or 0.12 percent, to 1,488.75.

Also investors await word on whether Chrysler will complete its sale to Italy's Fiat. Justice Ruth Bader Ginsburg on Monday put at least a temporary hold on Chrysler's swift move through bankruptcy. Ginsburg could decide on her own to end the temporary order or she could refer the matter to the full Supreme Court to decide on whether to allow the sale to be completed.

After June 15, Fiat can walk away from the deal and leave the U.S. automaker facing a potential liquidation in bankruptcy. But a spokesman for Fiat said Tuesday that the Italian carmaker won't walk away from Chrysler.

On Monday, the market reversed steep losses in the last hour of trading as commodity prices came off their lows late in the day. The Dow ended less than 2 points higher after being down 130 points earlier in the session.

Volume though, was light, which can skew gains and losses.

Investors will also continue to keep a close eye on Treasury prices as yields on two-year and 10-year notes rose to new yearly highs Monday ahead of a fresh round of auctions this week. There is concern the Federal Reserve will need to hike interest rates before the end of the year to combat potential inflation.

In early trading Tuesday, bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.83 percent from 3.89 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, was flat at 0.18 percent.

Yields on the two-year Treasury note fell Tuesday to 1.35 percent from 1.42 percent late Monday.

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

Overseas, Japan's Nikkei stock average fell 0.8 percent. In afternoon trading, Britain's FTSE 100 rose 0.3 percent, Germany's DAX index gained 0.03 percent, and France's CAC-40 rose 0.2 percent.

[Associated Press; By STEPHEN BERNARD]

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