MW: U.S. stock futures edge up as House readies vote
By Steve Goldstein, MarketWatch
LONDON (MarketWatch) -- U.S. stock futures pointed to a moderate rise on Friday after a troubled week, with the market reacting to a report showing 159,000 jobs lost in the last month, a new buyout deal for Wachovia and the upcoming House of Representatives vote on the $700 billion bailout package.
S&P 500 futures rose 6.9 points to 1,131.30 and Nasdaq 100 futures added 6.75 points to 1,517.25. Dow industrial futures added 26 points.
U.S. employment fell by 159,000 in September, the worst job losses since March 2003, the Labor Department reported Friday. Job losses in September were worse than expected and double the average monthly loss this year.
Economists surveyed by MarketWatch were forecasting payrolls to fall 110,000.
The dollar lost a bit of ground vs. the yen while oil futures were about flat.
Elsewhere, Wachovia reached a deal to be bought by Wells Fargo in a deal that won't require any Federal Deposit Insurance Corp. assistance, valued at $15.1 billion of Wells Fargo stock.
Citigroup had previously reached a deal to buy Wachovia's banking operations with FDIC help. Wachovia said the new agreement was "superior."
Wachovia shares shot up 69% in pre-open trade. Citi dropped 13%, and Wells Fargo rose 5%.
The bailout package will be put before the House for a second time on Friday. A White House spokesman said some House members have said they will switch their no votes, though the outcome of the vote is still in doubt.
Mickey Levy, chief economist for Bank of America, said the lender now expects a half-point rate cut from the Federal Reserve at or before the scheduled Oct. 28-29 FOMC meeting.
"We place a high probability on an inter-meeting move, perhaps as soon as next week as a complement to the enactment of the Treasury bailout legislation," Levy told clients.
Kansas City Fed President Thomas Hoenig, in a question-and-answer session late Thursday, said rates were "accommodative." Hoenig doesn't get to vote on interest rate decisions.
American International Group said it will focus on property and casualty insurance as it sells off assets to pay off the Fed's $85 billion loan.
U.S. stocks dropped sharply on Thursday as jobless claims and factory orders data overshadowed the Senate passage of the bailout passage. The Dow industrials dropped 348 points, the Nasdaq Composite stumbled 92 points and the S&P 500 lost 46 points.