Wall Street was bracing for a bloodbath Monday morning in New York after a White House task force gave General Motors' and Chrysler's comeback plans a thumbs down and cautioned that bankruptcy may be the next step for both.
General Motors' chairman and chief executive officer Rick Wagoner was forced out and is stepping down with immediate effect. The Obama Administration will continue to provide operating funds for the next few weeks, but has given the companies a final deadline, threatening bankruptcy if the beleaguered auto giants do not step up their efforts to reorganize.
As of 6:15 am ET, the S&P Futures were down 19 points, the NASDAQ Futures were down 29 points, and the Dow Futures were down 180 points.
Stocks pulled back on Friday as a relief rally from the previous few session ran out of steam. March was shaping up to be a solid month, with the major averages moving out of technical bear market territory, but this is shaping up to be a brutal week, with the news from the Detroit completely taking the wind out of Wall Street sails.
The major averages all ended Friday's session firmly in negative territory after ending Thursday's trading at one-month closing highs. The Dow closed down 148.38 points or 1.9 percent at 7,776.18, the Nasdaq closed down 41.80 points or 2.6 percent at 1,545.20 and the S&P 500 closed down 16.92 points or 2 percent at 815.94.
Monday, Biogen Idec, Inc said it named Robert Hamm as its Chief Operating Officer, or COO, effective immediately. Hamm, who has been Executive Vice President, Pharmaceutical Operations & Technology at the company since 2007, replaces Hans Peter Hasler, who is leaving the company.
Energy stocks were set to tumble after the price of oil dropped nearly $2 to $50.50 a barrel in early electronic dealing. The dollar was taking a beating versus the yen, but was higher versus the euro and sterling.
While there are no major economic reports due to be released on Monday, there are several key reports that will be released over the course of the week, including the Labor Department's closely watched monthly employment report on Friday.
President Obama will speak Monday before heading across the Atlantic to the London summit of the G20 group of industrialized and emerging economies.
Ensuring that there is concerted action around the globe to jump start economic growth and that we are advancing a regulatory reform agenda to ensure that this crisis never happens again will be the key messages of the London trip, White House Press Secretary Robert Gibbs said Saturday.
Asian stocks were pummeled on Monday, with Tokyo's Nikkei dropping 390 points and the Hang Seng of Hong Kong losing 663 points.
In European intraday dealing the FTSE of the UK was down 99 points, the CAC of France was down 149 points, and the DAX of Germany was down 81 points.
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