Futures edge lower on oil rebound, credit worries
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Mon, 25 Aug 2008 11:37:12 GMT |
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By Kristina CookeNEW YORK (Reuters) - Stocks index futures edged lower on Monday after Friday's sharp gains as the price of oil rebounded and credit concerns nagged.Lehman Brothers shares fell about 10 percent in European trading after a top regulator voiced concern about state-run Korea Development Bank's interest in buying a global bank.Shares of Lehman Brothers, which has been hard hit by the credit crisis, had soared on Friday after KDB said it was open to the acquisition of an overseas financial institution, naming Lehman as one option.Any news on when and whether the U.S. Treasury will take steps to rescue mortgage finance giants Fannie Mae and Freddie Mac could determine market direction. Investors increasingly believe a federal bailout of the two mortgage finance companies will be needed as they face mounting losses.Investors will also scrutinize existing home sales data for July at 10 a.m. (1400 GMT) for more clues on the state of the housing market."I think the focus is going to be similar to last week, with the market awaiting news out of the Treasury regarding Fannie Mae and Freddie Mac and whether it moves to smooth market anxiety," said Peter Cardillo, chief market economist at Avalon Partners in New York."Also this morning we are seeing a little bit of a rebound in oil prices."S&P 500 futures fell 2.60 points and were slightly below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.Dow Jones industrial average futures fell 7 points and Nasdaq 100 futures slipped 2.50 points.Further fueling concerns about fallout from the credit crisis, bank regulators closed Columbian Bank and Trust Company on Friday, the ninth U.S. bank to fail this year, as the weakening economy and falling home prices take their toll on financial institutions.Oil rose by more than $1 a barrel despite a rising U.S. dollar, as traders saw buying opportunities after prices fell more than $6 in the previous session.European stock markets edged lower as oil rose, but volume was thin due to a British local holiday that closed London markets.U.S. stocks rallied on Friday to score their best daily gain in two weeks as hopes Lehman Brothers may attract a major investor buoyed financial stocks and oil prices plunged.(Editing by Kenneth Barry)
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