Wall Street was poised to take a bit of a break Tuesday after a huge two-day rally as stock index futures were mixed while investors awaited a reading on the economy's output.
The pause in the market's gains was to be expected given the enormity of the advance over two sessions. Stock futures had been lower early Tuesday before turning moderately higher and then fluctuating.
While a reading on the nation's gross domestic product most certainly will show the economy weakened, investors will be eager to determine the rapidity of slowdown. The report comes after two strong sessions for the market in which investors held out hope that the economy could begin to repair itself.
Stocks rallied Friday on word that President-elect Barack Obama was close to naming his economic team _ a step he formally took Monday. Stocks extended their gains Monday as investors cheered the government's bailout plan for troubled Citigroup Inc. Many observers regarded the plan as a template for how other banks could be propped up and gleaned from comments of officials that the government wouldn't allow major institutions to fail.
Wall Street expects that economic activity contracted for the July-September quarter at a faster pace than the annual rate of 0.3 percent that the Commerce Department initially reported last month. Gross domestic product likely decreased at a 0.5 percent annual rate in the third quarter, according to economists polled by Thomson Reuters. The report is due at 8:30 a.m. EST.
Investors also will be awaiting a report on consumer sentiment in November. The Conference Board's report is expected to show a further decline from already weak levels as the job market has deteriorated and the stock market has retreated.
Economists, on average, expect the research group's Consumer Confidence Index to fall to 37.9 in November from 38 in October. Last month's reading was the weakest since the research group began tracking the index in 1967. The report is due at 10 a.m.
Investors also will be looking to comments from Treasury Secretary Henry Paulson, who is scheduled to provide an update on the government's efforts to stabilize the financial system. He is expected to speak at 10 a.m. Meanwhile, Obama is expected to unveil his plans for fiscal restraint even as his economic team puts together a stimulus package that could total several hundred billion dollars.
Ahead of the data and the comments, Dow Jones industrial average futures fell 19, or 0.23 percent, to 8,366. Standard & Poor's 500 index futures rose 6.00, or 0.71 percent, to 854.00. Nasdaq 100 index futures advanced 6.50, or 0.57 percent, to 1,153.50.
The gains over the course of Friday and Monday left the market with its first two-day advance in three weeks. The 11.8 percent gain gave the Dow its biggest two-day percentage gain since October 1987, the month of the Black Monday crash. The blue chips' 891-point jump over the two sessions also wiped out the 872-point plunge it suffered on Wednesday and Thursday, when investors worried about the prospects for Citigroup and financial companies in general, and the nation's automakers.
Early Tuesday, the yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.23 percent from 3.33 percent late Monday. For the three-month T-bill, considered one of the safest investments, the yield rose to 0.10 percent from 0.01 percent late Monday.
The dollar was higher against most other major currencies, while gold prices fell.
Light, sweet crude fell $2.76 to $51.74 in premarket electronic trading on the New York Mercantile Exchange.
In corporate news, Starbucks Corp. warned in a regulatory filing late Monday that it expects sales will continue to weaken, at least through the end of the fiscal year. The Seattle-based coffee chain said in its annual report that it expects same-store sales, or sales at stores open at least a year, to decline in fiscal 2009. Same-store sales are an important retail metric because they measure how established stores are performing, not just new ones.
Hewlett-Packard Co. on Monday posted fiscal fourth-quarter earnings that topped Wall Street's forecast as strong laptop sales helped offset falling printer orders and weakness in some server lines.
Overseas, Japan's Nikkei stock average rose 5.22 percent. In afternoon trading, Britain's FTSE 100 rose 1.79 percent, Germany's DAX index rose 0.58 percent, and France's CAC-40 rose 1.01 percent.
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