Stocks head for higher open after Wednesday's rout
Thursday September 18, 8:10 am ET
By Madlen Read, AP Business Writer
Stocks head for higher open; central banks plan to inject markets with $180B, but fear remains
NEW YORK (AP) -- Wall Street headed for a higher open Thursday after the previous session's massive rout that sent investors fleeing stocks in response to the bailout of insurer American International Group Inc.
ADVERTISEMENT
On Thursday, the U.S. Federal Reserve and other major central banks around the world have joined forces to inject as much as $180 billion into global money markets in an attempt to keep the credit crisis from worsening.
But fears have not abated. Trading is apt to be volatile as market participants try to figure out how to proceed in what is looking to be the most troubling period for the world's financial system in most investors' memory.
The big fear on Wall Street is that there are more significant financial companies to fall. Speculation is swirling about the futures of such major players as thrift bank Washington Mutual Inc. and investment bank Morgan Stanley. Media reports have been saying that Wells Fargo & Co. and Citigroup Inc. are interested in a possible takeover of Washington Mutual, and that Morgan Stanley and Wachovia Corp. are in talks about a possible combination.
After a giant loss on Monday, a rebound on Tuesday, and then another plunge on Wednesday, stock futures were higher ahead of Thursday's opening bell.
Dow Jones industrial futures rose 104, or 0.98 percent, to 10,768. Standard & Poor's 500 index futures rose 16.00, or 1.38 percent, to 1,178.90. Nasdaq 100 index futures rose 18.00, or 1.09 percent, to 1,665.00.
Monday's 504-point loss in the Dow was its biggest drop since the drop following the September 2001 terror attacks. The blue-chip index is now about 24 percent below its Oct. 9, 2007, record of 14,164.53.
In early trading Thursday, Treasury prices slipped. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.45 percent in early Thursday trading, up from 3.42 percent late Wednesday.
On Wednesday, the three-month Treasury bill -- considered one of the safest short-duration assets -- saw demand surge so high that its yield briefly dipped into negative territory for the first time since 1940.
Gold prices, another safe haven, rose further on Thursday, after posting their largest one-day price jump ever on Wednesday.
Oil is not considered as safe as gold but it, too, has been drawing investors who deem it safer than stocks. Light, sweet crude for October delivery on the New York Mercantile Exchange rose $2.18 to $99.34 a barrel in electronic premarket trading, after rising by more than $6 a barrel on Wednesday.
The dollar fell against most other major currencies.
Overseas, Japan's Nikkei stock average dropped 2.22 percent to its lowest closing level in over three years. Hong Kong's Hang Seng index lost 0.03 percent.
In midday trading in Europe, Britain's FTSE 100 rose 2.01 percent, Germany's DAX index rose 1.61 percent, and France's CAC-40 rose 1.55 percent.
New York Stock Exchange:
NYSE, New York Stock Exchange
Nasdaq Stock Market:
NASDAQ Stock Market - Stock Quotes - Stock Exchange News - NASDAQ.com
