Wall Street seen weaker on Clear Channel woes
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Wed, 26 Mar 2008 11:11:03 GMT |
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By Eva KuehnenFRANKFURT (Reuters) - Stock index futures weakened on Wednesday as the global credit crisis threatened to thwart Clear Channel's buyout, while investors also eyed Oracle earnings and economic data.The $20 billion leveraged buyout of U.S. radio operator Clear Channel Communications could fall apart, with banks increasingly reluctant to provide financing, a source familiar with the situation told Reuters.Clear Channel shares fell 19.4 percent after the closing bell on Tuesday and were trading down 22.7 percent in Frankfurt By 1033 GMT, June Dow Jones, Standard & Poor's 500 and Nasdaq 100 futures were down around 0.1 percent. The benchmark indexes gained between 2 and 3 percent last week.The indicative Dow Jones index <.DJII> was up 0.4 percent."The main focus remains on financials," said David Pieper, analyst at German bank LBBW in Stuttgart."In the short term I think we have seen the low point in U.S. stock markets. But in the long term, unexpected negative news could lead to further setbacks," he added.Stocks rallied on Monday mainly on news of a revised buyout offer for beleaguered Wall Street investment bank Bear Stearns from JPMorgan Chase & Co .Stronger-than-expected earnings from Goldman Sachs , Lehman Brothers and Morgan Stanley last week also gave a boost to investors' confidence."If financials manage to stabilize further, the whole market will stabilize eventually. It all depends on the development of the financial sector," Pieper said.Main focus on Wednesday will be on durable goods data for February at 8:30 a.m. EDT and new home sales at 10 a.m. EDT, along with earnings updates from technology major Oracle and payroll service company Paycheck .On Tuesday, an unexpectedly sharp drop in U.S. consumer confidence, hitting a five-year low in March, temporarily weighed on U.S. stocks.It was offset by rebounding metal and oil prices, which lifted mining and energy shares. The Dow Jones industrial average <.DJI> eased 0.1 percent, the Standard & Poor's 500 Index <.SPX> rose 0.2 percent and the Nasdaq Composite Index <.IXIC> added 0.6 percent.Later this week, homebuilders Lennar Corp and KB Home release results.(editing by Elizabeth Fullerton)
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