U.S. stock futures struggle on financial, oil worries

By Daniel | May 6, 2008

U.S. stock futures struggle on financials, oil worries

By Steve Goldstein, MarketWatch

Last Update: 7:57 AM ET May 6, 2008

LONDON (MarketWatch) - U.S. stock futures struggled on Tuesday, as oil futures
largely retained their strength and as earnings from Fannie Mae, UBS and D.R.
Horton pointed to continued turmoil in the financial and housing markets.

S&P 500 futures slipped 7.5 points to 1,400.80 and Nasdaq 100 futures fell 8.75
points to 1,971.75. Dow industrial futures fell 59 points.

U.S. stocks dropped on Monday, with Microsoft’s withdrawal of its Yahoo takeover
bid and a spike in commodity prices depressing sentiment. The Dow industrials
lost 88 points, the Nasdaq Composite fell 12 points and the S&P 500 lost 5
points.

There wasn’t much commodity price easing on Tuesday — oil futures were broadly
unmoved, down 9 cents at $119.88 a barrel, and gold futures rose $2.70 to $876.80
an ounce.

The U.S. dollar was weaker against the Japanese yen but up on the British pound.

Financial- and housing-sector results weren’t warmly received.

Builder D.R. Horton (DHI) said it swung to a $1.3 billion loss, with revenue
dropping to $1.6 billion from $2.6 billion.

Fannie Mae (FNM) did even worse, reporting a $2.2 billion loss. Fannie shares
dropped nearly 10%, and D.R. Horton lost over 7%.

Troubled lender UBS (UBS) said it plans to cut 5,500 jobs and sell a $15 billion
chunk of its risky mortgage assets to BlackRock Inc. (BLK) as it reported a
first-quarter loss of nearly $11 billion, broadly in line with an earlier
warning. The assets being sold have a nominal value of around $22 billion and are
being sold at roughly the price they had been marked-down to on UBS’ balance
sheet.

There were a number of other earnings releases, including Emerson Electric (EMR)
upping its profit forecast for the year, Joy Global (JOYG) trimming its estimates
this year, and Qwest Communications (Q) reporting a 35% profit drop.

After the close, Walt Disney (DIS) and Cisco Systems (CSCO) report quarterly
financials.

NYSE Euronext (NYX) beat expectations after reporting its quarterly profit jumped
to $230 million from $68 million thanks to its acquisition of the European stock
exchange operator Euronext.

Apple (AAPL) signed an agreement with Vodafone Group (VOD) to distribute the
iPhone in ten countries, including Italy, India and Turkey.

The FTSE 100 slipped 0.8% in London while the Hang Seng rose 0.3% in Hong Kong.

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