Wall Street futures mark time
Wednesday, 10 June 2009
NEW YORK, June 9 (AP): United States (US) stock futures moved in narrow range Tuesday as investors awaited word on which banks might be able to repay government loans and as Fiat expressed its continued commitment to a deal with Chrysler.
The US government is expected to announce as early as Tuesday morning which of the nation's largest banks can repay government bailout loans provided to the sector last fall. Goldman Sachs Group Inc., JPMorgan Chase & Co. and American Express Co. are among the banks expected to get the go ahead to repay the loans.
Rob Lutts, president and chief investment officer of Cabot Money Management, said banks getting approval to repay the government loans is a positive sign for the battered sector and provides a psychological boost for investors.
"It's part of the healing process for the banking industry," Lutts said.
Experts have said such repayments would indicate some stability has returned to the banking sector, which was thrown into chaos last fall with the collapse of Lehman Brothers. However, by granting only some banks the ability to return funds, the experts say that could create a tiered banking system with some large firms still tied to the government bailout having to figure out how to compete with those no longer connected to the loans.
The government loans come with certain conditions such as restrictions on executive compensation.
Meanwhile, investors were reassured by comments from a Fiat spokesman Tuesday that the Italian carmaker is committed to buying a controlling stake in the distressed US automaker Chrysler despite a US Supreme Court stay on the deal.
On Monday, US Supreme Court Justice Ruth Bader Ginsburg put at least a temporary hold on Chrysler's swift move through bankruptcy. Ginsburg could decide on her own to end the temporary order or she could refer the matter to the full Supreme Court to decide on whether to allow the sale to be completed.
Under terms of the agreement, Fiat has the option to abandon the deal if it is not completed by June 15, leaving Chrysler with few options other than to liquidate under bankruptcy court supervision.
On Tuesday in Italy, Fiat spokesman Gualberto Ranieri said "Fiat won't walk away from Chrysler."
Ahead of the market's opening Tuesday, Dow Jones industrial average futures rose 19, or 0.22 per cent, to 8,778. Standard & Poor's 500 index futures rose 3.20, or 0.34 per cent, to 942.00, while Nasdaq 100 index futures gained 7.50, or 0.50 per cent, to 1,498.00.
On Monday, the market reversed steep losses in the last hour of trading as commodity prices came off their lows late in the day. The Dow ended less than 2 points higher after being down 130 points earlier in the session.
Volume though, was light, which can skew gains and losses.
Investors will also continue to keep a close eye on Treasury prices as yields on two-year and 10-year notes rose to new yearly highs Monday ahead of a fresh round of auctions this week. There is concern the Federal Reserve will need to hike interest rates before the end of the year to combat potential inflation.
The US government is expected to announce as early as Tuesday morning which of the nation's largest banks can repay government bailout loans provided to the sector last fall. Goldman Sachs Group Inc., JPMorgan Chase & Co. and American Express Co. are among the banks expected to get the go ahead to repay the loans.
Rob Lutts, president and chief investment officer of Cabot Money Management, said banks getting approval to repay the government loans is a positive sign for the battered sector and provides a psychological boost for investors.
"It's part of the healing process for the banking industry," Lutts said.
Experts have said such repayments would indicate some stability has returned to the banking sector, which was thrown into chaos last fall with the collapse of Lehman Brothers. However, by granting only some banks the ability to return funds, the experts say that could create a tiered banking system with some large firms still tied to the government bailout having to figure out how to compete with those no longer connected to the loans.
The government loans come with certain conditions such as restrictions on executive compensation.
Meanwhile, investors were reassured by comments from a Fiat spokesman Tuesday that the Italian carmaker is committed to buying a controlling stake in the distressed US automaker Chrysler despite a US Supreme Court stay on the deal.
On Monday, US Supreme Court Justice Ruth Bader Ginsburg put at least a temporary hold on Chrysler's swift move through bankruptcy. Ginsburg could decide on her own to end the temporary order or she could refer the matter to the full Supreme Court to decide on whether to allow the sale to be completed.
Under terms of the agreement, Fiat has the option to abandon the deal if it is not completed by June 15, leaving Chrysler with few options other than to liquidate under bankruptcy court supervision.
On Tuesday in Italy, Fiat spokesman Gualberto Ranieri said "Fiat won't walk away from Chrysler."
Ahead of the market's opening Tuesday, Dow Jones industrial average futures rose 19, or 0.22 per cent, to 8,778. Standard & Poor's 500 index futures rose 3.20, or 0.34 per cent, to 942.00, while Nasdaq 100 index futures gained 7.50, or 0.50 per cent, to 1,498.00.
On Monday, the market reversed steep losses in the last hour of trading as commodity prices came off their lows late in the day. The Dow ended less than 2 points higher after being down 130 points earlier in the session.
Volume though, was light, which can skew gains and losses.
Investors will also continue to keep a close eye on Treasury prices as yields on two-year and 10-year notes rose to new yearly highs Monday ahead of a fresh round of auctions this week. There is concern the Federal Reserve will need to hike interest rates before the end of the year to combat potential inflation.