Wall Street points toward higher opening

AP
Wall Street points toward higher opening
Wednesday January 21, 7:14 am ET 
By Stephen Bernard, AP Business Writer

Wall Street looks to rebound Wednesday from sharp Tuesday drop tied to battered banking sector

NEW YORK (AP) -- Investors still worried about the troubled banking industry got some solace Wednesday from more upbeat earnings news from technology companies. Stock futures pointed to a rebound at the opening from Tuesday's huge loss.

Technology giant IBM Corp. provided a better-than-expected profit outlook for 2009. After the market closed Tuesday, IBM said it expects to earn $9.20 per share this year -- 45 cents per share better than the average analyst estimate, according to Thomson Reuters.

IBM also said its fourth-quarter profit jumped 12 percent, easily topping analysts' estimates.

Swedish wireless equipment maker LM Ericsson also reported better-than-expected fourth-quarter profit, although earnings fell. It shares were trading higher in trading in Stockholm Wednesday.

Dow Jones industrial average futures rose 91, or 1.15 percent, to 8,036. Standard & Poor's 500 index futures gained 9, or 1.12 percent, to 815, while Nasdaq 100 index futures rose 7.25, or 0.63 percent, to 1,154.75.

The Dow tumbled 332.13, or 4 percent, to 7949.09 on Tuesday. It was the first time the Dow closed below 8,000 since November.

Markets were battered Tuesday by fresh concerns about the global banking sector, and financial stocks led the selling.

The Royal Bank of Scotland said its 2008 loss might top $41 billion, which spurred the British government to announce a fresh banking bailout. In the U.S., State Street Corp. -- seen as one of the safer financial firms during the current turmoil because it is a custodial bank -- lost more than half its value after reporting plunging profit and a bleak outlook for 2009.

Citigroup Inc. and Bank of America Corp., which both last week reported multibillion dollar fourth-quarter losses, each plunged by more than 20 percent.

Later Wednesday, investors will also get a reading on the beleaguered housing market. The National Association of Home Builders is scheduled to report its January housing index at 1 p.m. EST.

Oil prices rose 34 cents to $41.18 a barrel in premarket trading on the New York Mercantile Exchange.

Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.43 percent from 2.37 percent late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.12 percent from 0.10 percent late Tuesday.

The dollar was mixed against other major currencies, while gold prices rose.

Overseas, Japan's Nikkei stock average fell 2 percent. In afternoon trading, Britain's FTSE 100 declined 1.1 percent, Germany's DAX index fell 0.6 percent, and France's CAC-40 fell 1.4 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com