Housing data to bring US stocks lower

NEW YORK (AP) - October 17, 2008

The Commerce Department is expected to report at 8:30 a.m. Eastern time that new home construction dropped in September to an annual rate of 880,000 units, according to Wall Street economists surveyed by Thomson/IFR. Later, at 10 a.m., the University of Michigan is anticipated to report that consumer sentiment is declining in the month of October.

The market is also waiting for a speech by President Bush, who is expected to give more details on the government's plans to resolve the financial crisis that threatens to hurtle an already weak economy into a long, steep recession.

Ahead of the market's open, Dow futures fell 216, or 2.41 percent, to 8,750. Standard & Poor's 500 index futures fell 25.50, or 2.71 percent, to 915.50, and Nasdaq 100 index futures fell 50.00, or 3.78 percent, to 1,273.00.

It's been an erratic week on Wall Street, with the Dow soaring more than 900 points on Monday, slipping moderately Tuesday, sinking more than 700 points Wednesday, and then rallying 400 points Thursday. The volatility is not providing investors with much relief, but it is a welcome change from last week's seemingly relentless plunge, during which the Dow logged its worst week ever and Wall Street lost about $2.4 trillion in shareholder wealth.

The credit markets have been improving after moves by governments around the world, particularly plans to buy stakes in private banks to boost their lending. But there's still high demand for Treasury bills, regarded as the safest assets around, an indication that there is still much fear in the markets.

The three-month Treasury bill Friday yielded 0.51 percent, up from 0.47 percent on Thursday, indicating only a marginal let-up in demand. The yield has not gone above 1 percent in more than a week.

The dollar rose against most other major currencies.

Light, sweet crude for November delivery rebounded by $1.12 to $70.97 a barrel in premarket electronic trading on the New York Mercantile Exchange. On Thursday, it sank to a 14-month low on worries about a deep global recession obliterating fuel demand.

In earnings news, Schlumberger Ltd. reported a rise in third-quarter profit that was in line with analyst expectations. The oil field services company said tougher times might lie ahead, though.

Honeywell International Inc., the manufacturing conglomerate, is also scheduled to release third-quarter results Friday.

Markets overseas were mostly higher.

In Asia, Hong Kong's Hang Seng index dropped over 4.44 percent to its lowest level in almost three years, but Japan's Nikkei average rose 2.78 percent after a 11.4 percent loss Thursday. In Europe, Britain's FTSE index traded up 0.66 percent, Germany's DAX index rose 0.21 percent, and France's CAC-40 rose 0.96 percent.

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