Stock futures fall ahead of automakers' testimony

[November 18, 2008]  NEW YORK (AP) -- Wall Street appeared ready to retreat again Tuesday, as stock futures sank amid nervousness about the fate of Detroit's Big Three auto makers.

On Tuesday, executives of General Motors Corp., Ford Motor Co. and Chrysler LLC and the head of the United Auto Workers union will testify at a Senate Banking Committee hearing. The automakers, seeking $25 billion in government aid, have the backing of Democratic congressional leaders, but the Bush administration and Republican lawmakers are against the proposed bailout.

If there's one thing that Wall Street can't bear, it's uncertainty. Stocks have been trading erratically for several weeks as investors try to gauge the direction of the economy -- which relies heavily on jobs. A collapse of the U.S. auto industry would mean widespread job losses.

On Monday, Wall Street finished sharply lower in a volatile session as Citigroup announced more job cuts, the latest sign of pressures in the job market and the ongoing tumult in the embattled financial sector. The Dow Jones industrial average fell 223 points.

Ahead of the market's open on Tuesday, Dow Jones industrial futures fell 149, or 1.80 percent, to 8,110. Standard & Poor's 500 index futures fell 15.60, or 1.83 percent, to 835.40, while Nasdaq 100 index futures fell 21.50, or 1.86 percent, to 1,137.00.

In addition to the automaker testimony, investors will be focusing on testimony by Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson before the House Financial Services Committee on Tuesday.

Wall Street will also be parsing economic data. The Labor Department releases its October reading on producer prices at 8:30 a.m. Eastern time; the National Association of Realtors releases third-quarter area home prices and sales at 10 a.m..; and the National Association of Home Builders issues its monthly outlook at 1 p.m.

In earnings data, Home Depot Inc. reported a 31 percent drop in third-quarter profit due to weak consumer spending at its established locations. The profit was better than analysts anticipated, however.

In other corporate news, Yahoo Inc. founder Jerry Yang late Monday announced that he was stepping down as chief executive of the Internet company. Many analysts believe the departure will accelerate an overhaul of Yahoo and lead to a sale to Microsoft.

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

Light, sweet crude fell 15 cents to $54.80 a barrel in premarket electronic trading on the New York Mercantile Exchange.

In Asian trading, Japan's Nikkei index fell 2.28 percent, and Hong Kong's Hang Seng Index fell 4.54 percent. In morning trading in Europe, Britain's FTSE 100 fell 1.65 percent, Germany's DAX index fell 1.43 percent, and France's CAC-40 fell 1.63 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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