US STOCKS-Lower open seen on credit jitters, bailout's fate
* Senate to vote on new version of $700 bln bank bailout
* Bush approves $25 bln loan package for auto makers
* ADP employment data shows labor market weakness
* General Electric shares drop before the bell (Recasts first paragraph, updates prices)
By Ellis Mnyandu
NEW YORK, Oct 1 (Reuters) - U.S. stocks headed for a lower open on Wednesday on signs of continued strains in the credit markets and nervousness before a Senate vote on a revamped rescue plan for the financial sector.
A day after Wall Street notched its best day in six years after Monday's big slide, investors appeared to hedge their bets about how effectively the $700 billion bank rescue will help avert an economic slowdown and deteriorating profits.
The latest data pointed to a weaker job market. A report by ADP Employer Services showed U.S. private employers cut 8,000 jobs in September, fewer than expected, according to ADP data, but August job reductions were revised even higher.
"Blind faith doesn't work this time after Monday's disappointment," said Andre Bakhos, president of Princeton Financial Group in Princeton, New Jersey. "People are cautious and they lack confidence that a bailout plan will be a one-stop solution. It won't be."
S&P 500 futures SPc1 fell 11.30 points and were slightly below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.
Dow Jones industrial average futures DJc1 fell 57 points and Nasdaq 100 NDc1 futures declined 18.25 points.
Shares of diversified manufacturer General Electric (GE.N), an economic bellwether, dropped 2.4 percent to $24.90 before the bell after Deutsche Bank cut its price target and outlook on GE, a Dow component. For details, see [ID:nWNAB4233]
But in a boost to carmakers, the White House announced on Tuesday that Bush approved a mammoth spending bill that includes a $25 billion loan package for automakers. [ID:nWEN8659]
Shares of General Motors GM.N rose 1.6 percent to $9.60 before the bell, but those of Ford (F.N) slipped 7.1 percent to $4.83. In another sign of doubts about the financial system, the interbank cost of borrowing dollars over three months again rose on Wednesday. [ID:nL1217803]
The Senate's modified rescue legislation will include a sharp increase in the amount of bank deposits insured by the Federal Deposit Insurance Corp and tax breaks the House of Representatives has rejected.
The rescue plan, which would allow the Treasury Department to buy bad mortgage-related assets from banks, had been the main hope for government action to unlock credit markets and head off a deeper economic downturn in the United States and abroad.
Republican House members voted against the rescue package on Monday by about 2-to-1. A majority of Democrats voted in favor. Wall Street had its best day in six years on Tuesday, a day after its worst sell-off since the October 1987 stock market crash, as investors bet Washington would revive the rescue plan. (Editing by Kenneth Barry)
