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Wall Street heads to uneasy open

The Associated Press

NEW YORK — Wall Street looked to stage a moderate advance Thursday, hopeful that a bill to rescue Detroit's car makers will pass despite concerns that the Senate might block the aid.

The $14-billion (U.S.) of loans to cash-starved General Motors Corp. and Chrysler LLC could go before the Senate as early as Thursday. But, based on concerns raised by Republicans, and even some uncertain support among Democrats, approval is not guaranteed.

Those opposed are arguing that any support for the domestic auto industry should carry significant concessions from autoworkers and creditors and reject tougher environmental rules imposed by House Democrats. The House approved the plan late Wednesday on a vote of 237-170 to infuse money within days to the two struggling auto makers. Ford Motor Co. has said it does not need aid.

The heads of the three auto makers said that even one of the companies going into bankruptcy would slam an already battered economy with thousands of job losses. And Wall Street is expected to receive even more gloomy news about the job market when the government releases a report on new unemployment claims at 8:30 a.m. EST.

The number of new claims for jobless benefits last week is projected to have increased to a seasonally adjusted 525,000, up from 509,000 the previous week, according to Wall Street economists surveyed by Thomson Reuters. The jobless claims report comes a day after the federal government said the monthly budget deficit reached a record in November, in part because of increased spending on programs such as unemployment insurance and food stamps.

Dow Jones industrial average futures rose 35, or 0.33 per cent, to 8,750, while Standard & Poor's 500 index futures added 0.60, or 0.07 per cent, to 896.40. Nasdaq 100 futures rose 5.25, or 0.41 per cent, to 1,222.00.

Wall Street rose in late trading on Wednesday after a surge in gold and other commodities prices gave investors a reason to snap up energy and materials stocks. The Dow rose 70 points during the session.

The early corporate news pointed to a continuing slowdown in consumer spending, troubling because consumers drive more than two-thirds of the economy.

Costco Wholesale Corp. reported fiscal first-quarter profit that missed Wall Street projections. Chief Financial Officer Richard Galanti said in a statement the company was “hurt by a slowdown in non-food discretionary sales and related reductions in margins.”

Meanwhile, Procter & Gamble Co. reduced its sales projections for the fiscal second quarter because retailers, distributors and consumers are cutting back on inventories around the world.

In the Treasury market, the yield on the three-month T-bill fell to 0.01 per cent from 0.02 per cent late Wednesday, indicating a high degree of investor unease. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.68 per cent from 2.69 per cent late Tuesday.

The dollar was lower against most other major currencies, while gold was higher.

Oil prices rose above $45 a barrel with investors hoping for a significant OPEC production cut next week to boost the market. Light sweet crude jumped $1.98 to $45.50 a barrel in electronic trading on the New York Mercantile Exchange.

Stock markets were mixed overseas. Hong Kong's Hang Seng index closed up 0.23 per cent, while Japan's Nikkei 225 added 0.70 per cent. In Europe, Britain's FTSE-100 rose 0.34 per cent, Germany's DAX fell 0.26 per cent, and France's CAC-40 shed 0.28 per cent.

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