Small caps to open slightly higher
After major losses suffered on Tuesday, stocks are expected to open modestly higher Wednesday, propelled by President Obama's anticipated announcement at 12:15 pm ET of a plan to prevent mortgage foreclosures.
The announcement will come on the heels of new housing data, released at 8:30 a.m. ET. The Commerce Department said construction of new homes and apartments fell to a record low annual rate of 466,000 in January, a 16.8% drop compared with analyst predictions of a mere 5% drop. Analysts were forecasting an annual rate of 530,000 units from 550,000 units in December. A main cause of the recession has been steep drops in housing prices and sales coupled with rising foreclosures; a solid housing plan out of the Obama administration will be seen as welcoming news to investors.
In other economic data out in pre-market, import prices fell for the sixth month in a row in January. This signals that low commodity prices and the global recession will be major elements of disinflation in the months ahead.
General Motors (NYSE:GM) and Chrysler submitted their proposal late Tuesday to the U.S. Treasury, asking for a combined $22 billion more in emergency loans to keep the automakers from going bankrupt. GM shares were 3.2% higher in pre-market.
Later today Federal Reserve Chairman Ben Bernanke will be speaking and the Fed will release minutes of the Jan. 28 meeting.
