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Stock Futures Down Amid Earnings Worries

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[April 14, 2008]  NEW YORK (AP) -- Wall Street was poised to open lower Monday as investors grew more concerned about companies' earnings power after the U.S. bank Wachovia Corp. and the Dutch conglomerate Royal Philips Electronics NV posted disappointing quarterly results.

Wachovia surprised investors Monday with a first-quarter loss of $393 million, after preferred dividends, and cut its quarterly dividend to shareholders by 41 percent to 37.5 cents a share. The bank, which analysts had expected to post a profit, said it plans to raise $7 billion through a stock offering. Wachovia shares tumbled about 10 percent in pre-market trading.

And in a sign that the slumping U.S. economy is hurting companies overseas, Royal Philips Electronics reported a sharp drop in first-quarter profit as a decrease in television sales in North America offset growth in its health care and lighting industries.

The reports preceded Monday's anxiously anticipated Commerce Department reading on March retail sales. Analysts are expecting sales to come in flat following February's drop.

After a sharp drop in the stock market on Friday, Dow Jones industrial average futures were down 56, or 0.45, at 12,283. Standard & Poor's 500 index futures fell 5.30, or 0.40 percent, to 1,330.30. Nasdaq 100 index futures fell 9.25, or 0.51 percent, to 1,797.00.

Bond prices edged higher. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.44 percent from 3.48 percent late Friday.

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In dealmaking news, Northwest Airlines Corp. pilots have threatened to oppose a combination with Delta Air Lines Inc., but officials were nonetheless mobilizing to announce a deal to create the world's biggest airline as early as Tuesday -- provided the boards of the two companies give final approval to the deal, people familiar with the talks said Sunday.

Meanwhile, Blockbuster Inc. said it is taking its unsolicited $1 billion-plus bid for Circuit City Stores Inc. directly to shareholders. The movie rental chain said the consumer electronics chain is dragging its feet on a deal that's been discussed for months.

Light, sweet crude rose 74 cents to $110.88 a barrel in premarket electronic trading on the New York Mercantile Exchange.

Gold prices turned higher, and the dollar fell against other major currencies.

Overseas, Japan's Nikkei stock average fell 3.05 percent. Britain's FTSE 100 fell 0.77 percent, Germany's DAX index fell 1.09 percent, and France's CAC-40 fell 0.68 percent.


On the Net:

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

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

[Associated Press; By MADLEN READ]

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

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