* Fears of global swine flu outbreak hit stock futures
* GM to eliminate Pontiac brand; shares rise
* Futures down: S&P 17.10, Dow 146, Nasdaq 21.75
* For up-to-the-minute market news click []
(Adds details, byline)
By Leah Schnurr
NEW YORK, April 27 (Reuters) - Wall Street looked set for a
drop of more than 1 percent at the open on Monday as investors
worried that a possible global flu outbreak could throw a
wrench into the economy's ability to climb out of a recession.
Governments around the world moved to contain the spread of
a possible swine flu outbreak, as a virus that has killed over
100 people in Mexico spread to the United States and Canada and
may have reached as far as New Zealand. (For details, see
[])
"Right now it's putting a dent in the market and will
continue to serve as a fear factor," said Andre Bakhos,
president of Princeton Financial Group in Princeton, New
Jersey.
"Until some visibility arrives on where this is going and a
greater study of the implications, it will weigh on the
market."
In the auto industry, General Motors Corp <GM.N> unveiled
new restructuring plans, including the elimination of the
Pontiac brand to focus on four core brands. [].
GM, trying to secure the government funding it needs to
stay in business, was expected to announce a fresh round of
cost cutting on Monday. [] Shares of GM jumped 4.7
percent to $1.77 ahead of the opening bell.
In earnings reports Monday morning, Verizon Communications
Inc <VZ.N>, the No. 2 U.S. phone company, reported
higher-than-expected quarterly profit after a 12 percent
revenue increase, helped by its purchase of a smaller rival and
growth in cell-phone customers. Verizon's shares added 1
percent to $31.30 in premarket trading. [].
S&P 500 futures <SPc1> fell 17.10 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> lost 146
points, and Nasdaq 100 <NDc1> futures slid 21.75 points.
Jitters over what a government stress test of 19 major
financial institutions might reveal could add to volatility.
The Obama administration is due to release the results on May 4
but some of the details are expected to start trickling out
before that.
Shares of Wells Fargo & Co <WFC.N> fell 4.7 percent to
$20.39 after influential analyst Richard Bove downgraded the
bank to "hold" from "buy."
As GM pushed ahead with its restructuring plans, rival
Chrysler LLC <CBS.UL> showed signs of progress with its
unionized workers with just days left to complete deals to
slash labor and debt costs or face bankruptcy.
Elsewhere on the earnings front, cell-phone chip supplier
Qualcomm Inc <QCOM.O> swung to a loss, hurt by investment
losses and costs related to its legal settlement with Broadcom
Corp <BRCM.O>. Qualcomm's shares rose 3.4 percent to $42.75.
Stocks rallied Friday as earnings showed companies have
weathered the recession, and economic data raised hopes the
economic cycle may have hit a bottom.
On Sunday U.S. President Barack Obama's economic adviser,
Lawrence Summers, said the sense of "unremitting freefall" in
the U.S. economy has ended and the picture is now mixed.
[].
The broad S&P 500 is up about 28 percent from March's bear
market low in a rally spurred by growing optimism over the
health of banks and signs the economic slowdown may be waning.
Data on tap includes a reading from the Dallas Fed's Texas
manufacturing index for April at 10:30 a.m. EDT (1430 GMT) and
the Chicago Fed's Midwest manufacturing index for March at
12:00 p.m. EDT (1600 GMT).
(Reporting by Leah Schnurr; editing by Jeffrey Benkoe)
