MarketWatch.com - Pre-Market Indications

Friday, February 29, 2008

U.S. stock futures drop on economy fears; AIG, Dell fall - MarketWatch

U.S. stock futures drop on economy fears; AIG, Dell fall - MarketWatch

Oil futures fell 45 cents to $102.13 a barrel while gold futures rose $1.90 to $969.40 an ounce.
Of stocks in focus, American International Group (AIG:
AIG
, a component of the Dow Jones Industrial Average, dropped 5.2% in pre-open trade after it reported a $5.29 billion fourth-quarter net loss late Thursday, as the insurance giant took a big charge related to the estimated market value of credit derivatives.
The AIG report came on a day when Thornburg Mortgage and hedge fund firm Peloton Partners LLP reported they were hurt by exposure to Alt-A home loans.
Bond insurer Assured Guaranty (AGO:
AGO
rose 13.9% as WL Ross agreed to buy up to $1 billion in stock.
Elsewhere, Dell Inc. (DELL:
DELL
fell 2.4% after it reported a fourth-quarter profit that fell 6% from a year ago despite a rise in revenue, as the PC maker was hit with several charges related to acquisitions and restructuring efforts.
Chief Financial Officer Don Carty said on a conference call, "We are seeing, as I said, some conservatism [regarding] IT spending in the U.S., especially in the financial services sector. It does remain to be seen, however, how this may unfold."
Gap Inc. (GPS:
GPS
, the largest U.S. clothing chain, rose 4.9% as it said fourth-quarter profit rose 21% after it kept inventory lean to limit profit-eroding discounts. The company said it plans to reduce North American stores' sizes to make them more productive. See story.
3Com (COMS:
COMS
shot up 29% on a report from The Wall Street Journal that Bain and Huawei will try again to secure U.S. approval for a takeover bid.
International stock markets were lower, with heavy losses in particular for the Nikkei 225, which lost 2.3% in Tokyo on the yen's surge, and for the Sensex, down 1.4% after the Indian government proposed an increase in capital-gains taxes.

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