Flu weighs on Wall Street
Stocks set to tumble at open as investors worldwide worry about economic fallout of swine flu outbreak. GM unveils restructuring.
NEW YORK (CNNMoney.com) -- U.S. stock futures sank Monday as investors worried about the economic impact of a global swine flu outbreak and digested a restructuring plan from General Motors.
At 8:45 a.m. ET, Dow Jones industrial average, Standard & Poor's 500 and Nasdaq-100 futures were sharply lower.
Futures measure current index values against perceived future performance and offer an indication of how markets may open when trading begins in New York.
Swine flu outbreak: The World Health Organization has called the outbreak of swine flu a "public health emergency of international concern."
Mexico seems to be the center of the outbreak, although cases have spread to countries around the world.
As many as 103 deaths in Mexico are thought to have been caused by swine flu, CNN reported. In the United States, the largest number of cases has been reported in New York City.
Most U.S. airlines, including Delta (DAL, Fortune 500), American Airlines (AMR, Fortune 500), Continental (CAL, Fortune 500), United (UAUA, Fortune 500) and U.S. Airways (LCC, Fortune 500) have begun to waive fees for customers who have tickets to Mexico and wish to change their travel plans due to the flu outbreak.
"There are certain companies that are being affected by the flu, and people are worrying that this could mushroom into full-blown epidemic," said Peter Cardillo, chief market economist at Avalon Partners. "Obviously that would cut into GDP, and with global economies still in recession, that would add to economic woes."
Autos: General Motors (GM, Fortune 500) announced a restructuring plan Monday morning in an attempt to avoid entering bankruptcy. The company said it would cut 7,000 to 8,000 jobs in addition to the previously announced job cuts, terminate its Pontiac line by 2010, cut more dealerships and restructure its debt.
Shares of GM rose in premarket trading.
On Sunday, Chrysler reached a tentative labor agreement with the United Auto Workers -- a key step in final efforts to help the automaker avoid bankruptcy.
Market downgrade: Credit Suisse downgraded its rating on U.S. stocks one notch on Monday, saying the equities were expensive relative to those in other countries. The bank's report also said that first quarter earnings have been mediocre.
"Markets are also lower because Credit Suisse downgraded its rating on the U.S. market," Cardillo said. "Combined with the flu concerns, people have a reason they were looking for to take some profits off the table."
Cardillo said that many investors are worried that the seven-week market rally will end this week, as a number of economic reports -- including an initial report on first-quarter gross domestic product -- will likely pressure stocks. He believes the flu outbreak and market downgrade have given anxious investors the excuse to sell off some of their positions.
Earnings: Whirlpool (WHR, Fortune 500) on Monday reported profit fell 27% and sales dropped 23% in the first quarter. The company cut its outlook on exports.
Verizon Communications (VZ, Fortune 500) reported slighly higher earnings than a year earlier. Qualcomm (QCOM, Fortune 500) posted a net loss.
World markets: Concern about the economic fallout of the flu outbreak pressured airline and hotel stocks in overseas trading.
Most Asian shares tumbled, although Japan's Nikkei finished the session with slight gains. Major European markets were all lower in midday trading.
Oil and money: Oil prices tumbled, with U.S. light crude for June delivery falling $2.75 to $48.80 a barrel in electronic trading.
The dollar edged higher against the euro and was down slightly versus the yen. 
