Foreign Markets
Asian indices were mixed on Friday, where the Nikkei 225 stock average rose 110.49 points, or 1.5 %, to 7,568.42 — but finished the month down nearly 4 % to extend this year’s losses to almost 15 %. In Hong Kong, the Hang Seng pulled back 0.7 % to 12,880.89 in a back-and-forth session. South Korea’s Kospi rose 0.8 % to 1,063.03. Stocks lost significant ground in Europe, where Britain’s FTSE 100 plunged 2 % to 3,834.89, Germany’s DAX lost 2 % to 3,863.96, and France’s CAC 40 dropped 1.5 % to 2,702.89.
U.S. Futures
The market may look to test 7,000 as Citi shareholders will be extremely diluted, while investor’s wait for more economic data in the premarket. Dow Jones industrial average futures fell 83, or 1.2 %, to 7,095. Standard & Poor’s 500 index futures fell 8.50, or 1.1%, to 743.50, while Nasdaq 100 index futures rose 5.75, or 0.5 %, to 1,126.50.
Currencies and Commodities
The dollar traded at 97.462 yen, down 1.0684% in the currency market. The euro lost 0.871% to $1.2632. The pound also depreciated against the dollar, a 1.05% move to $1.4166. Gold rebounded $17 to $959.50 an ounce, while silver rose 2.62% to $13.32 as the precious metals pulled back yesterday. Crude plunged 5.24% to $42.85 as investor’s eye the weak economic data to be released.
Corporate News
Fannie Mae (FNM) is seeking $15.2 billion in government aid after reporting losses of $25.2 billion, or $4.47 per share, in the fourth quarter. That compares with a loss of $3.6 billion, or $3.80 a share, in the year-ago period. The mortgage giant, which was seized by the federal government in the fall, lost nearly $59 billion in 2008.
Citi reached a deal with the government to increase its holdings in the troubled financial giant to as much as 36%. The company will offer to exchange up to $27.5 billion of its existing preferred stock held by private investors at a conversion price of $3.25 per share, a 32 % premium over Thursday’s closing price of $2.46. The government will match up to $25 billion of preferred stock it currently owns for conversion at the same price.
Economic News
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Quarter 4 Gross Domestic Product: GDP measures all the goods and services produced within the United States during the second quarter. The consensus for real GDP (taking inflation into account) in the fourth quarter is a decline of 5.4%. Real GDP fell by 0.5% in the 3rd quarter of 2008, while preliminary readings had 4th quarter GDP falling at -3.8%.
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Consumer Sentiment: Consumer sentiment is directly related to the strength of consumer spending, by questioning 500 households each month on their financial conditions and attitudes about the economy. The consensus reading for February is 56, down 20 basis points from January’s measurement.
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