NEW YORK - Stocks headed for a slide at Tuesday's opening on concern that the recession is worsening and that efforts to stabilize the stricken global financial system may not be enough.
A drop on Wall Street would mark another leg of a global equity rout that hit Asian markets overnight and drove European stocks down about 2 percent as appetite for riskier assets ebbed.
Top drags would include financials, with shares of Bank of America
A report showing that manufacturing production in New York state fell to a record low in February added to worries about the deepening recession among investors already fearful that a new U.S. economic stimulus package won't be a quick fix.
There's just an absence of good news, said Rick Meckler, president of investment firm LibertyView Capital Management in New York. I won't be surprised to see the market come down and test the lows of late last year.
S&P 500 futures fell 26.20 points, and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 196 points, and Nasdaq 100 futures were off 35.50 points.
Wal-Mart Stores Inc
U.S. President Barack Obama is due to sign a $787 billion economic stimulus bill into law on Tuesday, but investors worried that the measure would not help soften the impact of the 14-month-old recession soon enough. The White House hopes the package will save or create 3.5 million jobs.
The reality is setting in now that this is not a quick fix, said Meckler. The package, whilst impressive in its scope, is going to take a long time to be implemented and as that is happening there are a lot of businesses that are in some very difficult positions already.
(Editing by James Dalgleish)