Credit ratings agency Standard & Poor's said after the stock market's close on Wednesday that credit losses for financial institutions could eventually swell to more than $265 billion. For details, see [ID:nWNA7836]. In addition, S&P said it cut or may cut its ratings on up to $534 billion of subprime bonds.
Early on Thursday, bond insurer MBIA Inc, (MBI.N: Quote, Profile, Research) posted a fourth-quarter loss after a $3.5 billion write-down.
Also likely to weigh on the market was Web retailer Amazon.com Inc (AMZN.O: Quote, Profile, Research), whose fourth-quarter results showed deteriorating profit margins.
Shares of MBIA and Ambac Financial Group Inc (ABK.N: Quote, Profile, Research), the other top bond insurer, fell sharply on Wednesday after a CNBC TV reporter's comments that the insurers will lose their top credit rating. The reporter didn't cite any sources. Stocks reversed gains made on the Federal Reserve's interest rate cut to close lower.
"We're looking at a lower opening across the board as the Fed rate cut is fading in the sun and worries about credit insurers are in the spotlight," said Peter Cardillo, chief market economist at Avalon Partners in New York.
S&P 500 futures SPc1 were down 4.60 points, well below fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.
source:www.reuters.com
Dow Jones industrial average futures DJc1 were down 57 points. Nasdaq 100 NDc1 futures were down 13 points.
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