Stock futures fall sharply
NEW YORK -- U.S. stock futures fell sharply Monday as concerns about soured debt mounted after Citigroup Inc. warned it plans to book $8 billion to $11 billion in additional losses.
The scope of Citi's expected losses led to renewed concerns among investors worldwide over credit. The expected write-downs came on top of the $6.5 billion in asset mark-downs and other credit-related losses the company recorded in the third quarter. Investors grew uneasy over the prospect of widespread write-downs. Some of the uncertainty centers on who might be holding more bad debt, including some that is kept at arm's length in off-book investment vehicles but that nonetheless could require some banks to take a hit should the investments falter.
The concerns weighed heavily on stock markets overseas, with Asian markets showing the steepest declines. Japan's Nikkei stock average fell 1.50 percent, while Hong Kong's Hang Seng index fell 5.01 percent. In Europe, Britain's FTSE 100 fell 1.38 percent, Germany's DAX index shed 0.63, and France's CAC-40 declined 0.97 percent.
Dow Jones industrial average futures fell 112, or 0.82 percent, to 13,530. Standard & Poor's 500 index futures fell 13.80, or 0.91 percent, to 1,503.80. Nasdaq 100 index futures lost 19.50, or 0.88 percent, to 2,204.00.
Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.29 percent from 4.32 percent late Friday.
The decline in stock market futures and the unease over Citi's debt follows the widely expected decision by Charles Prince to resign as the company's chairman and chief executive at an emergency meeting of its board Sunday.
In addition to concerns about debt, political uncertainty over a weekend decision by Pakistan President Gen. Pervez Musharraf to suspended the constitution helped shore up some support for the U.S. dollar as investors sought safety. The dollar rose against most other major currencies, while gold prices fell.
Light, sweet crude fell to $1.43 to $94.50 per barrel in premarket electronic trading on the New York Mercantile Exchange.
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