U.S. stocks were poised for a rebound after Monday's record selloff that followed Congressional rejection of a $700 billion Wall Street bailout package.
Stock futures pointed to gains early Tuesday, after a record 777-point drop in the Dow Jones industrial average Monday that marked the worst percentage drop for stocks since the 1987 crash. Futures are an indication of how the markets are expected to open, based on the difference between current and future levels.
Futures suggest a rally at the open: S&P futures vs fair value: +32.40. Nasdaq futures vs fair value: +27.80.
That sharp slide continued in Asian markets Tuesday, although most of the indexes there closed off their low of the day. Still Japan's Nikkei lot 483 points, or 4%, while Australia's markets fell 4.3% and Taiwan's stocks lost 3.6%. But Hong Kong's Hang Seng closed narrowly higher, and Europe's major indexes were mixed in early trading there.
Even if the broader U.S. markets show some improvement Tuesday, bank stocks could be under the greatest pressure again the day after the KBW Bank Index (BKX) fell 21%. While Citigroup saw shares rebound 2.6% in heavy Frankfurt trading after losing 12% in U.S. trading Monday, most other major U.S. banks trading there were lower in early overseas trading, with JPMorgan Chase off 5.9%, Bank of America down 8.5% and Wells Fargo off 5.2%.
U.S. Treasuries were slightly lower in early trading, taking the yield on the benchmark 10-year note to 3.67% from 3.6%, after a flight to Treasuries sent the yield plunging in trading Monday.