Thursday December 11, 02:29 PM
US STOCKS-Wall St set to fall at open on auto worries
By Chuck Mikolajczak
NEW YORK, Dec 11 (Reuters) - U.S. stock headed for a lower open on Thursday as investors worried about the fate of legislation to bail out troubled U.S automakers and signs the labor market was deteriorating as the recession worsens.
The proposal, providing up to $14 billion in loans to the beleaguered automakers, was passed by the House of Representatives late Wednesday, but its prospects looked grim in the Senate where supporters face a struggle. For details, see
A Senate vote on the plan is expected as early as Thursday.
Shares of General Motors (NYSE: GM - news) were little changed at $4.61 and Ford slipped 3 percent to $3.15 before the bell.
Concerns about the auto bailout were compounded by a government report that showed the number of people filing for new unemployment benefits rose more than expected in the latest
week.
'It looks like a big jump in both initial and continuing claims, and when combined with the decline with import prices, these are more signs of an economy that is decelerating on the downside with price deflation.' said Jim Awad, chairman of W.P. Stewart & Co in New York.
'I think this will be a negative for the market, and that it will create additional concerns about weakening in the economy and corporate profits.'
S&P 500 futures fell 4.7 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures dropped 74 points, and Nasdaq 100 (NASDAQ: news) shed 6.75 points.
Without government help. investors fear that a possible failure or bankruptcy in the auto sector could send shock waves through the economy and worsen unemployment.
Boeing (NYSE: BA - news) shares were likely to be among the drags on the Dow after the plane maker announced further delays for its newest jet. The stock was down 2.6 percent to $40.61.
(Additional reporting by Ryan Vlastelica; Editing by Kenneth Barry)
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