* Bank of America reports quarterly results
* Obama said U.S. economy remains under strain
* Futures down: S&P 13.90 pts, Dow 114 pts, Nasdaq 24.75
pts
* For up-to-the-minute market news click []
(Adds details)
By Leah Schnurr
NEW YORK, April 20 (Reuters) - Wall Street was set for a
lower open on Monday with investors cautious ahead of the
latest round of earnings and after Bank of America's results
relied heavily on one-time items as credit quality deteriorated
markedly.
Financial shares were likely to face pressure after Bank of
America Corp <BAC.N> said first-quarter profit more than
doubled as a surge in credit losses was offset by higher
revenue from the purchase of Merrill Lynch & Co and a one-time
gain from selling shares of a Chinese bank. (For details see
[]).
Bank of America was down 8.1 percent at $9.74 before the
opening bell.
Shares of Citigroup Inc <C.N> lost 6.6 percent to $3.41
after analysts at Goldman Sachs said credit losses at the bank
continued to grow at a rapid rate. [].
"There's this real sense that there are pending problems in
the financial space, that all of the issues have not been
addressed yet and it's definitely going to overhang this market
until we get a couple quarters out," said Peter Kenny, managing
director at Knight Equity Markets in Jersey City, New Jersey.
"There's a doubt to the prospect of a healthier financial
sector. You can feel it, it's palpable."
On the upside, shares of Sun Microsystems Inc <JAVA.O>
surged 37.7 percent to $9.21 after Oracle Corp <ORCL.O> said it
would buy the company for about $7.4 billion. The proposed deal
comes after IBM's <IBM.N> talks to buy Sun broke down earlier
this month.
S&P 500 futures <SPc1> dropped 13.90 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> slid 114
points, and Nasdaq 100 <NDc1> futures fell 24.75 points.
Adding to the negative tone, U.S. President Barack Obama
said over the weekend that the economy remains under strain and
his top economic adviser tempered hopes for a speedy recovery.
[].
American International Group Inc <AIG.N> delayed filing its
annual proxy statement as it weighs a potential reshuffling of
its board, the Wall Street Journal reported, citing a person
familiar with the matter. []
Among the round of morning earnings, Eli Lilly and Co
<LLY.N> reported higher-than-expected profit, sending the
drugmaker's shares up 2.8 percent at $34.70. [].
Stocks rose on Friday, with the Dow scoring its biggest
six-week gain in nearly 71 years, helped by a reassuring report
on the mood of consumers and stabilization in General Electric
Co <GE.N> and Citigroup's quarterly results.
As of Friday's close, the Dow is up 22.7 percent over the
past six weeks, making this the largest six-week gain since
July 29, 1938, while Friday's close also marked the S&P 500's
longest weekly winning streak since 2007.
After the bell, IBM investors will focus on the impact of
the global economic slowdown on the tech bellwether's results,
which have held up relatively well so far, thanks to its
software and services business.
Texas Instruments Inc <TXN.N> is also due to release
quarterly results after the close, while market watchers will
take in a reading on leading economic indicators later in the
morning.
(Reporting by Leah Schnurr; editing by Jeffrey Benkoe)
