RTRS: US STOCKS-Wall St set to drop on economic woe, Citi
By Ellis Mnyandu
NEW YORK, Nov 17 (Reuters) - U.S. stocks headed for a lower open on Monday after Japan became the latest major economy to slide into recession and Citigroup (C.N: Quote, Profile, Research, Stock Buzz) said it would cut about 50,000 jobs, heightening fears the global economic slump is deepening.
In earnings reports, Lowe's Cos Inc (LOW.N: Quote, Profile, Research, Stock Buzz) , the No. 2 U.S. home improvement retailer, forecast a fourth-quarter profit below Wall Street's estimates, and its shares fell 2.4 percent.
The news from Japan, the world's second-biggest economy, marked another big blow to investors' sentiment, along with the failure of this weekend's meeting of the world's 20 largest economies to come up with new stimulus measures for the world economy.
Stocks set to take a pounding include Dell Inc (DELL.O: Quote, Profile, Research, Stock Buzz) , down more than 5 percent before the bell, after Merrill Lynch cuts its rating on the computer maker.
Citigroup shares fell 2 percent to $9.31 before the bell after the U.S. bank said to cut costs it will cut as many as 50,000 jobs. For details, see [ID:nN17468336]
"There was some expectation that we will get more action versus commentary out of the G20," said Arthur Hogan, chief market analyst at Jefferies & Co in Boston.
"We are going to have a soft opening and then reassess by lunch time. Japan entering recession is just a 'me too' story. We are in a global recession."
S&P 500 futures SPc1 fell 8.10 points and were 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 DJc1 declined 87 points and Nasdaq 100 NDc1 futures fell 8.75 points.
Merrill cut Dell to "neutral" from "buy," sending the stock down to $10.34 before the bell.
News of Japan sliding into its first recession in seven years in the third quarter followed last week's news that the Euro zone had also entered recession.
Lowe's, whose shares fell to $17.80 before the bell, said it remained cautious about the near term. [ID:nN12293846].
Shares of Target Corp (TGT.N: Quote, Profile, Research, Stock Buzz) dropped 6 percent to $31.06 before the bell after the No. 2 U.S. discounter said it had suspended share repurchases. [ID:nWNAB4399] (Editing by Kenneth Barry)
