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NEW YORK (AP) – Stocks are set to extend their slide Friday, following the worst two-day stretch the market has seen since June.
Stock futures fell as better than expected earnings from General Electric and Google failed to inspire traders.
President Barack Obama spooked the market Thursday, after asking Congress for limits on how large big banks can be and to end some of the risky trading large financial companies have used in recent quarters to boost profits.
The market could be re-entering a period of uncertainty that defined the financial crisis and sent it cratering nearly a year ago before its 10-month rally.
Overseas, Asian markets overnight followed the U.S. sharply lower. European markets are also falling.
Not even the latest batch of upbeat earnings reports from major companies was able to provide some support for investors looking to limit the recent damage.
General Electric Co. reported fourth-quarter profit that beat analyst expectations. The conglomerate also said it is seeing an increase in orders and a growing backlog for products and services, sure signs that the economy is starting to improve.
Internet giant Google Inc. also provided an upbeat sign for the economy, posting robust fourth-quarter earnings that easily topped analyst estimates. The results were driven by a pickup in Internet advertising, which could be a sign companies are feeling more confident the economy will recovery and opting to spend more to draw in customers.
Credit card lender American Express Co. also beat expectations after it set aside less money for defaulting loans. Default and delinquency rates both fell from the previous quarter, another encouraging sign for the economy.
High loan losses have plagued the financial sector and any declines in defaults would be a welcome sign that the consumer is starting to recover.
Ahead of the opening bell, Dow Jones industrial average futures fell 39, or 0.4 percent, to 10,299. Standard & Poor’s 500 index futures declined 3.20, or 0.3 percent, to 1,107.90, while Nasdaq 100 index futures dropped 1.75, or 0.1 percent, to 1,839.25.
The Dow is trying to bounce back after losing 213 points Thursday and 336 points, or 3.1 percent, during the past two trading sessions. The losses have erased all the early gains seen in 2010.
Large financial firms, including JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. all plummeted Thursday. The three big banks, which have prominent consumer and investment banking operations, would likely be the hardest hit by Obama’s new regulations. Shares of each all declined more than 5 percent.
Meanwhile, bond prices dipped Friday morning. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.60 percent from 3.59 percent late Thursday.
The dollar was mixed against other major currencies, while gold prices declined.
Overseas, Japan’s Nikkei stock average fell 2.6 percent. Britain’s FTSE 100 declined 1.2 percent, Germany’s DAX index fell 1.1 percent, and France’s CAC-40 dropped 1 percent.