Wall Street Looks Ready to Bounce Back After Tuesday Losses
- Dec 10, 2008
Early morning indicators show preliminary numbers going up on the Standard & Poor’s 500, Nasdaq and Dow Jones industrial average futures, according to CNNMoney.com. The $15 billion automaker bailouts continue to dominate the financial news as plans, so far, are for General Motors and Chrysler to receive the funding in order to maintain operations through the end of the year. Ford Motor Co. has indicated it only wants access to the funding as a backstop for its operations, the report added. A number of reports are slated for release today including the Mortgage Bankers Association’s weekly mortgage market index for the week ended Dec. 5 versus the prior week; a wholesale inventories for October from the Commerce Department; and the Treasury Department’s November budget report, according to Reuters. CNNMoney said the government’s weekly report on petroleum inventory is also due for release today. Reuters reported that Rio Tinto will reduce its global headcount by 14,000 including nearly 6 percent of its own employees and more than half its contractors, slash capital spending and boost asset sales as it battles a collapse in commodity prices. The degree of risk aversion among investors was highlighted amid growing fears about a deepening U.S. recession, as three-month Treasury rates briefly dipped below zero on Tuesday, with the Treasury selling $30 billion of four-week bills at an unprecedented rate of 0.000 percent, according to Reuters. The Wall Street Journal reported that the Federal Reserve is considering issuing its own debt for the first time, a move that would give the central bank additional flexibility as it tries to stabilize rocky financial markets. Government debt issuance is largely the province of the Treasury Department, and the Fed already can print as much money as it wants. But as the credit crisis drags on and the economy suffers from recession, Fed officials are looking broadly for new financial tools. The Federal Reserve drained $25 billion in temporary reserves from the banking system when it arranged overnight reverse repurchase agreements, according to the Journal.