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Wall Street looks to recover after global rout
Tuesday October 7, 7:04 am ET
By Joe Bel Bruno, AP Business Writer
Wall Street heads to slightly higher open as investors hope for rate cuts globally


NEW YORK (AP) -- Wall Street headed for a slightly higher open Tuesday amid hopes that central banks around the world will cut interest rates to help alleviate turmoil in the credit markets.
Australia's central bank cut interest rates by the largest amount since 1992 in a surprise move, and that reignited hopes that others including the Federal Reserve and European Central Bank might follow. The move helped Asian markets, and later European bourses, rebound from a steep drop on Monday.

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Investors sent stock futures in the U.S. higher, as well. Dow Jones industrial average futures added 70, or 0.80 percent, to 10,034. Standard & Poor's 500 index futures rose 8.90, or 0.84 percent, to 1,062.20, while Nasdaq 100 futures fell 13.25, or 0.94 percent, to 1,419.75.

In Asia, the Nikkei 225 closed 3.58 percent lower, responding to a turbulent session Monday on Wall Street, where the Dow Jones industrials skidded as much as 800 points -- their largest one-day drop -- before closing with a loss of 370.

But later trading in Europe showed investors weren't inclined to keep selling. In Britain, the FTSE-100 rose 0.32 percent, Germany's DAX added 0.64 percent, and France's CAC-40 rose 1.27 percent.

Financial markets around the world have taken a bleak view of the global economy, believing that government bailouts including the $700 billion plan to rescue battered U.S. banks won't in the near term limit the damage to the banking systems of many countries.

Monday's sell-off put the Dow below 10,000 for the first time in four years, and that will likely bring some buyers into the market looking for bargains.

Both Federal Reserve Chairman Ben Bernanke and European Central Bank President Jean-Claude Trichet have speeches scheduled Tuesday, and the Fed is due to release minutes from the last interest-rate setting meeting.

However, concerns about the credit markets still pushed investors into the relative safety of government debt. The yield on the three-month Treasury bill fell to 0.48 percent from 0.50 percent late Monday. Demand for bills remains high because of their safety; investors are willing to take extremely low returns just to have their money in a secure place.

Investors also moved into longer-term Treasury bonds. The yield on the 10-year note fell to 3.51 percent from 3.58 percent late Monday.

Oil prices rebounded to near $90 Tuesday, a day after plunging to an eight-month low on concerns a global recession will undermine demand for crude. Light, sweet crude for November delivery was up $1.93 to $89.74 a barrel in electronic trading on the New York Mercantile Exchange.

In corporate news, Bank of America Corp. is expected to fall after reporting that profit fell 68 percent during the third quarter. The bank also said it will raise $10 billion by issuing common stock and slashed its dividend.

Wall Street is also looking for Alcoa Corp. to unofficially kick off earnings season when it releases results after the closing bell.