Friday May 9, 10:57 AM
WALL STREET OUTLOOK Lower open seen on oil, AIG results, Citi asset sale report
LONDON (Thomson Financial) - Wall Street is on track to open lower Friday as concern mounted over the impact on the economy of a seemingly inexorable rise in oil prices, with a larger-than-expected quarterly loss at American International Group
(NYSE: AIG - news) further undermining sentiment.
A news report that Citigroup (NYSE: C - news) is considering selling $400 billion in non-core assets in order to restore profit growth also unsettled investors.
According to spread bettors IG Index, the Dow Jones Industrial Average is expected to open down 105 points at 12,762. Separately, S&P 500 futures were off 6.90 points at 1,385.10, while Nasdaq 100 (NASDAQ: news) futures fell 6.75 points to 1,958.25.
'One story that could rumble into today is the poor first quarter numbers from insurance giant AIG. News that the company are going to raise $12 billion has left investors worried about the state of the companiy's finances,' said Claire Collingwood, a dealer at CMC Markets.
On Thursday, stocks ended higher, helped by gains for energy and other commodities companies as oil prices extended their record-breaking run.
The rise in crude futures showed no signs of abating after the price of oil hit a fresh all-time high of $124.92 in New York as funds looked to take advantage of peak prices.
Citigroup shares will be in focus after the UK's Financial Times said the bank is looking at a plan to sell more than $400 billion in non-core assets to reduce costs and restore profit growth to double-digit rates, quoting people close to the situation.
Weak earnings from American International Group did little to boost sentiment.
The insurance company, a Dow component, posted a much wider-than-expected quarterly loss due to its exposure to the credit markets, and said it will raise $12.5 billion through a public offering in a bid to shore up its capital base.
On the economic front, the Commerce Department is expected to report that the nation's trade deficit narrowed to $60.8 billion in March from $62.3 billion in the prior month.
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