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Bonds News

US STOCKS-Lower open seen as Caterpillar woes weigh

 * Caterpillar outlook heightens recession worries
 * Wyeth takeover by Pfizer gives sentiment a prop
 * Housing data, corporate earnings eyed
 * For up-to-the-minute market news, click [STXNEWS/US]
 By Ellis Mnyandu
 NEW YORK, Jan 26 (Reuters) - U.S. stock index futures
pointed to a lower Wall Street open on Monday after Caterpillar
Inc CAT.N offered outlook that added to investors' fears
about the deepening recession.
 The news from the maker of bulldozers and excavators, also
a major exporter, deflated earlier enthusiasm that had been
spurred by a multi-billion dollar takeover in the drug
industry.
 Shares of Caterpillar, a Dow component, dropped more than
12 percent to $31.20 before the bell, positioning the stock to
become one of the worst drags on the market.
 S&P 500 futures SPc1 slipped 0.40 points and were 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 shed 18
points, while Nasdaq 100 NDc1 futures edged up 0.25 points.
 Before Caterpillar's announcement, Dow futures had been up
more than 40 points.
 Caterpillar forecast 2009 profit would drop significantly
from 2008. The company also said it initiated actions which
will remove about 20,000 workers from its business as it
grapples with fallout from the recession. For details, see
[ID:nN21475857]
 But shares of Wyeth WYE.N jumped more than 5 percent
before the bell to $46.20 after Pfizer Inc PFE.N , the
world's largest drugmaker, said it would buy its U.S. rival for
about $68 billion in a move to diversify its revenue base.
[ID:nN26291129]
 (Editing by Chizu Nomiyama)


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