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Stock futures fall after Bank of America profit falls short

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[April 21, 2008]  NEW YORK (AP) -- Stocks headed toward a lower open Monday after a weaker-than-expected profit report from Bank of America Corp. stirred concerns about the health of corporate earnings.

Bank of America's report that first-quarter earnings fell 77 percent on write-downs and widening credit losses stirred some unease among investors after strong gains in the stock market last week. The advance last week came as companies in general turned in better-than-expected numbers for the first quarter.

Investors have at times worried that a slowing economy and a potentially hesitant consumer crimped profit-making in the first three months of the year.

With little in the way of economic data scheduled to arrive this week, investors are looking at a big flow of corporate reports for insights into the well-being of the economy. Beyond Bank of America Corp., Merck & Co. reported a stronger-than-expected first-quarter profit. Both Bank of America and Merck are among the 30 stocks that comprise the Dow Jones industrial average.

The report from Bank of America weighed on stock futures, which had been narrowly mixed in the early going. The bank, which recently acquired mortgage lender Countrywide Financial, said its profit totaled $1.21 billion, or 23 cents per share. Analysts had been expecting earnings of 41 cents per share, according to Thomson Financial.

Beyond Bank of America, investors also weighed action by the Bank of England on Monday to ease tightness in the credit markets. The bank said it would enact a $100 billion plan that would allow banks to swap mortgage-backed securities for British Treasury bills.

Stocks futures showed investors making modest bets Monday after big gains Friday helped push each of the major stock indexes to advances of more than 4 percent last week.

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Dow industrial futures fell 24, or 0.19 percent, to 12,786. Standard & Poor's 500 index futures fell 4.00, or 0.29 percent, to 1,383.90, and Nasdaq 100 index futures slipped 6.50, or 0.34 percent, to 1,896.50.

Bond prices slipped. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.71 percent from 3.70 percent late Friday. The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude rose 31 cents to $117 per barrel in premarket electronic trading on the New York Mercantile Exchange. Oil jumped to a record $117.40 per barrel after a rocket struck a Japanese oil tanker near Yemen and as militants in Nigeria said they had attacked pipelines. An OPEC official said over the weekend that the group isn't likely to increase production also supported prices.

Overseas, Japan's Nikkei stock average slipped 0.13 percent. In morning trading, Britain's FTSE 100 rose 0.24 percent, Germany's DAX index fell 1.07 percent, and France's CAC-40 fell 1.13 percent.


On the Net:

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

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

[Associated Press; By TIM PARADIS]

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


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