NEW YORK (AP) — Wall Street was poised to extend its losses Friday, a day after the Dow Jones industrial average sank to its lowest level in more than six years and triggered a global sell-off overnight.
Stock prices fell almost 2 percent on Friday in Japan and were down more sharply by afternoon in key European markets after the Dow ended Thursday at its lowest level since Oct. 9, 2002, the depths of the last bear market.
Key financial stocks, like Citigroup Inc. and Bank of America Corp., were falling again in premarket trading Friday after being battered Thursday. Both Citi and Bank of America have been among the hardest hit by the ongoing turmoil in the industry and received multiple multibillion investments from the government to help stabilize their operations.
Stocks have fallen steadily over the past two weeks as investors lost confidence in multiple Obama administration programs aimed at bolstering the economy. The market’s inability to rally signals that investors don’t have a sense of when the recession, already 14 months old, will end.
A new report on consumer prices, a key measure of inflation, is scheduled to be released Friday providing more insight into how the economy is faring. The Consumer Price Index likely rose by 0.3 percent last month, according to economists surveyed by Thomson Reuters. The CPI fell 0.7 percent in December after drops of 1.7 percent in November and 1 percent in October.
Core inflation, which excludes volatile food and energy prices, is expected to post a slight 0.1 percent gain in January. The Labor Department is scheduled to release the CPI report at 8:30 a.m. EST.
Investors received further evidence of the sagging economy as home improvement retailer Lowe’s Cos. said its fourth-quarter profit dropped 60 percent as customers cut back on spending. Lowe’s provided a 2009 earnings forecast that is short of analysts’ expectations as it consumer spending continues to wane.
Ahead of Friday’s open, Dow futures fell 136, or 1.82 percent, to 7,326. Standard & Poor’s 500 index futures fell 13.60, or 1.74 percent, to 765.80, while Nasdaq 100 index futures declined 16.00, or 1.37 percent, to 1,154.50.
Overseas, Japan’s Nikkei stock average declined 1.87 percent and Hong Kong’s Hang Seng fell 2.49 percent. In afternoon trading, Britain’s FTSE 100 declined 2.45 percent, Germany’s DAX index tumbled 3.70 percent, and France’s CAC-40 fell 3.13 percent.
Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.80 percent from 2.86 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, was flat at 0.30 percent compared with late Thursday.
The dollar mostly rose against other major currencies, while gold prices rose.
Oil fell $1.74 to $37.74 per barrel in premarket electronic trading on the New York Mercantile Exchange.