Monday Stocks Tumble on Swine Flu Concerns

Now at 8,001, down 74 points, Rachel

NEW YORK (AP) — Wall Street headed for a lower open Monday as worries about swine flu unsettled markets around the world.
The flu is not yet a global pandemic. The virus is suspected to be responsible for more than 100 deaths in Mexico, but the confirmed cases in the United States and Canada have been mild.
Still, investors are nervous that the flu could spread and thwart economic recovery, particularly in areas that rely on travel and tourism. Spain became the first European country to confirm a case of swine flu, and the European Union health commissioner advised Europeans to avoid nonessential travel to Mexico and the United States.
The virus is striking at a vulnerable time for the stock market and the economy. The Dow has jumped 23.4 percent from its nearly 12-year low on March 9, but stalled last week as investors plodded through a deluge of mixed earnings reports.
Craig Peckham, market strategist at Jefferies & Co., called the swine flu an “easy excuse” for investors to take profits. Underlying the selloff, he said, is the worry that the global economy will take a long time to recover despite recent positive signals.
The rally over the last several weeks “has been about the world getting less bad,” Peckham said. “At a certain point, further gains have to be predicated on things getting fundamentally better, as opposed to less bad.”
Ahead of the market’s open Monday, Dow Jones industrial average futures fell 147, or 1.8 percent, to 7,909. Standard & Poor’s 500 index futures fell 16.20, or 1.9 percent, to 850.30. Nasdaq 100 index futures fell 21.75, or 1.6 percent, to 1,353.25.
Overseas, Japan’s Nikkei stock average rose 0.2 percent, but Britain’s FTSE 100 fell 1 percent in afternoon trading. Germany’s DAX index fell 1.3 percent, and France’s CAC-40 fell 1.5 percent.
Many earnings reports have been better-than-expected. Verizon Communications on Monday, for example, posted first-quarter earnings and revenue that topped expectations despite the weak economy.
But Wall Street is also anxious as it waits for the results of the government’s stress tests of the 19 largest U.S. banks. Regulators briefed bank officials on Friday about the tests, which will determine which banks may need further help from the government, but the results will not be publicly released until May 4.
U.S. government bond prices rose. The yield on the benchmark 10-year Treasury note fell to 2.93 percent from 3.00 percent late Friday. Bond prices move opposite to yields.
The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude fell $2.75 to $48.80 a barrel in electronic trading on the New York Mercantile Exchange.
In corporate news, General Motors Corp. said it will cut 21,000 U.S. factory jobs by next year, phase out the Pontiac brand and ask the government to take company stock in exchange for half GM’s government debt. The automaker’s shares rose 4.7 percent in premarket trading.

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