Stock futures point lower ahead of gov't. moves

[February 10, 2009]  NEW YORK (AP) -- Wall Street pointed toward a lower opening Tuesday ahead of the government's unveiling of a revamped bank rescue plan and the expected Senate approval of a massive economic stimulus package.

Treasury Secretary Timothy Geithner is scheduled to announce how the government will spend the remaining $350 billion of the $700 billion financial bailout package passed by Congress last fall.

Among the expected revisions, the plan will impose tough new standards on future payments to banks and will expand an effort to help unfreeze the credit markets and get banks lending again.

The major overhaul seeks to address widespread criticism that banks were getting billions of dollars in taxpayer support without much oversight and that the government aid failed to increase lending and remedy the financial crisis.

The administration's new plan, officials said, will include a government-private sector partnership to help remove banks' soured assets from their books.

At the same time, an $838 billion stimulus bill was expected to win approval in the Senate. Congressional leaders hope to have the bill on President Obama's desk before a recess next week.

Ahead of the market's open, Dow Jones industrial average futures fell 68, or 0.83 percent, to 8,150. Standard & Poor's 500 index futures dropped 9.80, or 1.13 percent, to 855.30, while Nasdaq 100 index futures shed 13, or 1.02 percent, to 1,262.75.

Also Tuesday, the Commerce Department will release a report on wholesale trade inventories for December at 10 a.m. Eastern time. And Federal Reserve Chairman Ben Bernanke will testify at a House Financial Services Committee hearing on the central bank's efforts to provide liquidity during the financial crisis.

On Monday, stocks fluctuated between gains and losses for most of the day, ending the session with only modest changes in anticipation of the government's announcements. The Dow Jones industrials fell about 9 points to 8,270. Broader stock indicators were mixed after a big rally last week.

Bond prices were mixed early Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.94 percent from 2.99 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, was unchanged from late Monday at 0.32 percent.

The dollar rose against other major currencies. Gold prices rose.

Light, sweet crude rose $1.09 to $40.65 in electronic premarket trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average fell 0.29 percent. Hong Kong's Hang Seng index rose 0.81 percent. In late morning trading, Britain's FTSE 100 was down 1.13 percent, Germany's DAX index was down 1.46 percent, and France's CAC-40 was down 1.38 percent.

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[Associated Press; By SARA LEPRO]

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