Current Futures: Dow -204.00, S&P -25.00, NASDAQ -33.50
European Trade: Overnight equity markets plunged, as it seems the situation with the U.S. auto industry is worsening. U.S. futures also moved lower during the Asian and the European sessions.
Currently, there are a number of stories circulating among the world press. Associated Press relates that GM and Chrysler face bankruptcy, and are approaching their final months as the two companies failed to reach a viable agreement with its employees and debt-holders.
The bankruptcy story only surfaced in the last few hours. The official announcement is expected to be made by President Obama later today, but the story is credited to an unnamed senior administration official.
The two auto companies had a deadline of March 31 to present a viable plan to avoid bankruptcy and justify additional funds. However, neither of the two were able to impress Washington officials, or at least justify the second bailout package. GM requested another $16 billion, after it received $13.4 billion in December. Some sources say that Chrysler’s fate now lies on the Fiat deal. Most likely, if Chrysler reaches an agreement with Italian market it would receive its requested funds, worth $6 billion.
The overnight equity markets plunged, as additional details hit the wires. In the U.K.’s Ftse, only one company rose out of the 102 members, while on the smaller German Dax 30, every company declined. A possible auto company bankruptcy has the potential to leave millions of people unemployed in the U.S. alone, sending the credit crisis to a completely new level.
Tonight, the Nikkei plunged 390.89 points (4.53%) to 8,236.08. The Australian S&P/Asx fell 67.90 points (1.85%) to 3,604.40. The U.K. Ftse slipped 82.77 points (2.12%), while the German Dax declined 136.66 points (3.25%).
Crude oil continued to decline, now holding above the $50 benchmark. Crude oil for April delivery fell $1.50 (3.02%) to $50.80.
Gold rose helped by the market’s risk aversion stance. Bullion for immediate delivery gained $3.30 (0.36%) to $928.60.