The dominating story today would be the auto bailout failure. But there might be more drama and emergency actions before market opens. So the pre market tumble may not play out as anticipated. It will be interesting day to watch.
Dec. 12 (Bloomberg) -- Stocks tumbled around the world and the dollar slumped after the Senate rejected a bailout for American automakers, threatening to deepen the global recession. Treasuries rallied and yields fell to record lows.
The MSCI World Index lost 1.3 percent to 880.41 as of 9:43 a.m. in London after senators voted down a bill to provide $14 billion of emergency funds forGeneral Motors Corp. and Chrysler LLC. GM plunged 28 percent in Germany, while Honda Motor Co. and Daimler AG sank more than 6 percent. The dollar fell to a 13-year low against the yen, while the cost of protecting corporate bonds against default soared. Metals and crude oil slumped.
“The markets are still guided by fear,” said Robert Drijkoningen, The Hague-based head of the multi-asset group at ING Investment Management, which has $488 billion under management. “The markets are in a very dire situation and are in a very risk- averse situation. The short-term is bleak,” he said on Bloomberg Television.
Standard & Poor’s 500 Index futures sank 3.9 percent, indicating the benchmark for U.S. equities will extend yesterday’s 2.9 percent drop. Europe’sDow Jones Stoxx 600 Index lost 3.3 percent, while the MSCI Asia Pacific Index fell 3.9 percent.
“It’s over with,” Senate Majority Leader Harry Reid said on the Senate floor in Washington last night. “I dread looking at Wall Street tomorrow. It’s not going to be a pleasant sight.”