Wednesday, April 1, 2009

NEW YORK (AP) - After the Dow Jones industrials’ worst first quarter in 70 years, Wall Street is preparing to start the second quarter with a decline.

Investors sent stock futures lower ahead of Thursday’s Group of 20 meeting of finance ministers from around the world.

They were also cautious as they awaited gauges of the U.S. economy: a manufacturing activity index, pending sales of existing homes, construction spending data, and auto sales figures. The data are expected to show modest improvements, but investors have been hit recently with some downbeat economic readings.

Early Wednesday, the ADP National Employment Report said private sector employment dropped by 742,000 in March. The figure was higher than anticipated _ and a rattling sign ahead of the Labor Department’s Friday report on nationwide job cuts last month.

Investors are nervous that a big “blowout number” in job cuts might still lie ahead, said Todd Leone, managing director of equity trading at Cowen & Co. However, he added, a pullback after March’s massive stock rally could be a healthy move for the market as it tries to discern where the economy is headed.

“I don’t want to go straight up,” Leone said.

Before the market’s open, Dow Jones industrial futures fell 89, or 1.2 percent, to 7,473. Standard & Poor’s 500 index futures fell 11.10, or 1.4 percent, to 783.40. Nasdaq 100 index futures fell 17.75, or 1.4 percent, to 1,219.75.

The Dow is up 16 percent from the nearly 12-year low it hit in early March. But the index is still coming off the worst start to the year since 1939 _ the Dow dropped 13.3 percent in the first quarter. If investors don’t see signs of an economic turnaround, or a concerted effort from world leaders to fix the financial system, the market’s recent gains could dissolve.

As thousands of protesters gathered in London, President Barack Obama and British Prime Minister Gordon Brown tried to quash talk of a split between their respective countries and continental Europe. Brown said the G20 was just hours away from agreeing to global reforms of the financial system.

This week so far has been volatile. The Dow gained nearly 87 points Tuesday after plunging Monday by 254 points after Obama rejected the restructuring plans of General Motors Corp. and Chrysler LLC.

Worries that U.S. automakers will have to go through bankruptcy restructuring continue to weigh on the market.

In other corporate news, pharmaceutical company Celgene Corp. late Tuesday said first-quarter and full-year profit and sales would miss Wall Street expectations. Shares of Celgene tumbled 12 percent in premarket trading.

Bond prices were mixed in early trading Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.65 percent from 2.67 percent late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.23 percent from 0.20 percent.

Crude oil fell $1.44 to $48.22 a barrel in electronic trading on the New York Mercantile Exchange.

The dollar was mixed against other major currencies. Gold prices fell.

Overseas, Japan’s Nikkei stock average rose 2.99 percent. In afternoon trading, Britain’s FTSE 100 fell 0.81 percent, Germany’s DAX index fell 0.99 percent, and France’s CAC-40 fell 1.2 percent.


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