US Stocks Head for Lower Open

U.S. stocks headed for a lower open Wednesday after orders for big-ticket manufactured goods declined for a second straight month in February.

The Commerce Department report that durable goods orders fell 1.7 percent last month -- rather than rising as the market expected -- appeared to rekindle some unease about the health of the economy.

The report comes a day after stocks generally extended their gains after two sessions of sharp advances. The market's recent ability to add to its climb has been greeted by bullish investors as a sign that its troubles are on the mend; Wall Street hadn't succumbed to a recent pattern of selling off after such a strong move upward. The Dow Jones industrial average has risen more than 425 points in the past three sessions.

But the durable goods numbers made it unclear whether the rally would hold.

Government figures are also due after the opening bell on new home sales.

Dow Jones industrial average futures fell 38, or 0.30 percent, to 12,477. Standard & Poor's 500 index futures fell 4.30, or 0.32 percent, to 1,347.10, while Nasdaq 100 index futures fell 4.80, or 0.26 percent, to 1,821.20.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.50 percent from 3.51 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude rose $1.01 to $102.23 in premarket electronic trading on the New York Mercantile Exchange.

Corporate news appeared to weigh on some investors. Private equity firms leading a $19.5 billion buyout of Clear Channel Communications Inc. were having difficulty reaching terms with the banks committed to financing the deal and the plan was close to collapse, according to a report by The Wall Street Journal.

In other corporate news, Motorola Inc. said it plans to split its troubled handset business from other operations, creating two separate, publicly traded companies.

Electronic parts manufacturer Jabil Circuit Inc. posted a fiscal second-quarter loss and warned its third-quarter results will fall short of Wall Street's expectations.

Overseas, Japan's Nikkei stock average fell 0.30 percent. In morning trading, Britain's FTSE 100 fell 0.48 percent, Germany's DAX index fell 0.41 percent, and France's CAC-40 was off 0.62 percent.

Stocks Rise After Buffett Offer of Aid to Bond Insurers Eases Some Credit Concerns

Wall Street finished mostly higher Tuesday after billionaire investor Warren Buffett offered to help out troubled bond insurers, easing some of the market's concerns about further deterioration in the credit markets. The Dow Jones industrials rose more than 130 points.

In an interview on CNBC, Buffett said his Berkshire Hathaway Inc. holding company has offered a second level of insurance on up to $800 billion in municipal bonds. The reinsurance offer is for bond insurers Ambac Financial Group Inc., MBIA Inc. and Financial Guaranty Insurance Co., known as FGIC.

Word of the offer gave some investors relief although Buffett said a deal would only back municipal bonds, and not the risky and complicated financial instruments that many see as more likely to have problems. Still, further assurances on the soundness of municipal bonds could help shore up Wall Street's confidence and reinforce the differences in quality among various levels of debt.

Russell Croft, portfolio manager at Croft Leominster Investment Management in Baltimore, said Buffett's move gives the market a bit of needed confidence.

"It's a good thing to see," he said. He also agreed with Buffett's assessment that stocks are mostly fairly valued. "We could definitely test some more lows going forward but there was a pretty good drop-off there again and I think people are trying to take advantage of it to get some quality stocks at cheaper prices."

The Dow rose 133.40, or 1.09 percent, to 12,373.41. The blue chip index was up more than 200 points earlier in the session. The Standard & Poor's 500 index advanced 9.73, or 0.73 percent, to 1,348.86.

However, the Nasdaq composite index edged down 0.02, or less than 0.01 percent, to 2,320.04.

Tech stocks fell in the last hour of trading amid uncertainty about Microsoft Corp.'s bid to acquire Yahoo Inc. -- an overture that could eventually go hostile. In addition, Research In Motion Ltd. fell after its Blackberry e-mail system had an outage.

Bond prices fell Tuesday after Buffett's announcement. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.67 percent from 3.63 percent late Monday.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude fell 81 cents to settle at $92.78 a barrel on the New York Mercantile Exchange.

Buffett's overture to the big bond insurers reassured investors. Buffett said one firm rejected his offer and he is still waiting to hear from the other two.

Bond insurers write policies that promise to cover payments to bondholders if the entity that issued the bonds defaults. Reinsurance provides a second level of insurance on those bonds.

My Opinion

Investors should be careful not to read too much into the market's advance recent readings on U.S. retail spending show that Americans are hurting financially.

"Stock markets will have good days in bear markets,"

Investors also appeared pleased Tuesday by a government plan called Project Lifeline involving the six largest mortgage lenders to help at-risk borrowers with all types of mortgages retain their homes.

And adding to investors' upbeat mood, Credit Suisse Group sharply reduced its estimate of how much exposure it has to subprime mortgage debt. Switzerland's second largest bank said its debt tied to subprime mortgages, those given to borrowers with poor credit, fell to 1.6 billion francs ($1.45 billion) from 3.9 billion francs at the end of September. Its fourth-quarter net profit fell 72 percent because of write-downs. The company's U.S.-traded shares rose $1.11 to $51.94.

General Motors Corp. fell 52 cents to $26.60 after announcing a fresh round of buyouts to all 74,000 of its U.S. hourly workers represented by the United Auto Workers. The company also reported losses of $38.7 billion in 2007, the largest annual loss for an automotive company.

Yahoo fell 30 cents to $29.57 after the search engine's board rejected Microsoft's $44.6 billion bid. That raised speculation that Microsoft -- whose shares rose 13 cents to $28.34 -- might take its offer directly to shareholders.

Meanwhile, Research In Motion shares fell $2.97, or 3.1 percent, to $91.50 after the company acknowledged that its network service was widely disrupted Monday.

Advancing issues outnumbered decliners by 3 to 2 on the New York Stock Exchange, where consolidated volume came to 3.92 billion shares from 3.51 billion.

The Russell 2000 index of smaller companies rose 5.73, or 0.82 percent, to 705.48.

Overseas, Japan's Nikkei stock average inched up 0.04 percent and Hong Kong's Hang Seng index advanced 1.35 percent. Britain's FTSE 100 rose 3.54 percent and Germany's DAX index rose 3.33 percent. France's CAC-40 closed up 3.37 percent.

Dow, S&P 500 drop,Nasdaq up

The Dow and the S&P 500 dropped on Friday as concerns about the outlook of bond insurers weighed on financial shares, but bargain hunting in the technology sector pulled the Nasdaq into positive territory.

Shares of JPMorgan Chase & Co (NYSE:JPM - News) dropped 1.7 percent, and led the Dow's losers, while credit card and travel services company American Express Co (NYSE:AXP - News) slid 2 percent.

The drag from financial shares was driven in part by investor unease about the outlook for bond insurers after Moody's Investors Services cut its "AAA" ratings for bond insurer XL Capital Assurance, a unit of Security Capital Assurance (NYSE:SCA - News).
Comments from a Federal Reserve official saying a recession might not be avoidable were another headwind for stocks.

The Dow Jones industrial average (DJI:^DJI - News) was down 67.06 points, or 0.55 percent, at 12,179.94. The Standard & Poor's 500 Index (^SPX - News) was down 6.00 points, or 0.45 percent, at 1,330.91. The Nasdaq Composite Index (Nasdaq:^IXIC - News) was up 3.59 points, or 0.16 percent, at 2,296.62.

Investors fear that downgrades of bond insurers could further harm the banking sector and stunt the global economy as financial institutions take a hit from subsequent write-downs of their assets.

JPMorgan shares fell to $44.23 on the New York Stock Exchange, while shares of American Express dropped to $45.55.

Shares of MBIA Inc (NYSE:MBI - News), the world's largest bond insurer, slipped by 0.4 percent to $14.12.

The company on Thursday sold $1 billion of shares to raise capital it hopes will help it avoid a rating downgrade. The sale was at a discount to MBIA's closing price.

On the Nasdaq, Apple Inc (NasdaqGS:AAPL - News) provided the biggest lift to the index, with a gain of 1.7 percent to $123.24. Tech stocks recently have taken a beating as investors worried about business spending, making some stocks attractively priced.
as attractive valuations lured investors to seek bargains.

San Francisco Federal Reserve Bank President Janet Yellen, speaking in Honolulu, indicated on Thursday a willingness to cut U.S. interest rates further, but she said she was not confident a recession can be avoided this year.