Wall Street in upbeat moodFutures gain ground after Buffett unveils plan to aid troubled bond insurers.Video
NEW YORK (CNNMoney.com) -- Stock futures gained ground Tuesday after Warren Buffett unveiled a plan to help out bond insurers. Less than an hour before the start of trading, S&P and Nasdaq futures were higher, pointing to a strong open. Billionaire investor Buffett said he has offered funding to prop up bond insurers, whose shaky finances have threatened the markets. Wall Street also took in a string of earnings, including results from the nation's largest automaker GM. The company posted fourth-quarter earnings and sales, excluding special items, above Wall Street's estimates. Insurer Marsh McLennan (MMC, Fortune 500) reported that quarterly profit fell 62% from the same period last year on weakness in its risk and insurance services business. Drugmaker Schering Plough (SGP, Fortune 500) posted an earnings loss of about $3.4 billion in the fourth quarter related to its purchase of Organon BioSciences. Brewer Molson Coors will also announce its earnings before the bell Tuesday. A fresh bout of credit fears were sparked Monday when financial giant AIG (AIG, Fortune 500) warned it may take further losses from insuring complex debt instruments backed by subprime home loans. Despite those concerns, bargain hunting investors managed to help stocks finish the session higher. After the bell Monday, Microsoft (MSFT, Fortune 500) responded to the decision of Yahoo (YHOO, Fortune 500) to reject its nearly $45 billion unsolicited offer for the company, saying the decision was unfortunate and hinting that it may now launch a hostile bid. The statement said Microsoft remains committed to the deal and "reserves the right to pursue all necessary steps to ensure that Yahoo's shareholders are provided with the opportunity to realize the value inherent in our proposal." Shares of Microsoft gained 0.8% in early overseas trading in Frankfurt Tuesday, while Yahoo shares rose 0.5% in heavy trading there. In other corporate news, shares of Research in Motion (RIMM) lost 1.2% in after-hours trading after the company confirmed that its key product, the BlackBerry email service, went down Monday afternoon in a major outage. On the economic front, a plan to offer broad mortgage relief to homeowners is due to be unveiled later in the day. The plan would allow homeowners to suspend foreclosures for 30 days while more affordable loans are worked out. The participants of the plan include six of the nation's largest home lenders, including Countrywide Financial Corp (CFC, Fortune 500) and Bank of America Corp (BAC, Fortune 500), which has agreed to buy the nation's largest mortgage originator. Also included are Dow components Citigroup and JPMorgan Chase, the nation's largest thrift Washington Mutual and Wells Fargo & Co. In global trade, Asian stocks finished mixed. European shares edged higher as bargain hunters offset a steep drop in profit at Credit Suisse (CS). The Swiss bank's fourth-quarter profit dropped 72% after it took credit-related writedowns. |
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