Small caps to open lower
Stocks are expected to open lower today on worries that the government's stimulus won't be the quick fix investors had hoped for to cure the ailing economy.
President Obama is scheduled to sign the $787 billion stimulus bill into law today, and is set to to detail a plan on Wednesday to help stem mortgage foreclosures. By the way that stocks are selling off ahead of the opening, it seems investors have already priced the Obama news into the market and are looking for steadier direction. The Dow average futures fell 1.83% in pre-market, while the S&P's 500 index futures tumbled 2.09% and Nasdaq 100 index futures fell 2.36%.
Also in the news this morning is a proposal being hammered out between General Motors Corp. (NYSE:GM) and Chrysler LLC to submit to the Obama administration by Tuesday to illustrate the two battered automakers can return to profit. The proposal aims to cut jobs and pare brands, among other things, in hopes of securing billions of dollars in additional federal aid that the companies say they will pay back. General Motors is asking for another $4 billion on top of the $9 billion it has already received, while Chrysler wants another $3 billion on top of the already borrowed $4 billion.
The markets closed out a losing week on Friday, where Treasury Secretary Timothy Geithner's stimulus comments on Tuesday and the legislative voting on the bank bailout plan did little to squelch negative investor sentiment. On Friday the Dow closed at 7,850.41, its lowest close since Nov. 20, when the index settled at a nearly six-month low of 7,552.29. The Russell tumbled about 2% the same day.
Small-cap percentage gainers in pre-market trading this morning include health-care company Amedisys Inc. (Nasdaq:AMED), up over 4% after reporting record Q4 revenue and net income. Small-cap solar company JA Solar (Nasdaq:JASO), on the other hand, is down 9.4% in pre-market after news last week that the company lowered its revenue and production output guidance for FY 2009.
