* Government expands bailout of auto industry
* Data on Consumer confidence, home prices on tap
* Dow Chemical could tap $13 bln loan for takeover-report
* Volume expected to be light through the week
* For up to the minute market news, please click on
[].
By Leah Schnurr
NEW YORK, Dec 30 (Reuters) - U.S. stocks were poised to
rise at the open on Tuesday after Washington expanded its
bailout of the auto industry, while volume was expected to be
light in the holiday-shortened week.
Investors were also awaiting economic data later in the
day, including consumer confidence, a reading on business
activity in the U.S. Midwest, and data on home prices.
Late on Monday, the Bush administration said it was
increasing a loan to General Motors <GM.N> by $1 billion and
buying $5 billion in equity in GMAC, GM's finance arm.
It was the latest in a string of government moves in an
effort to ease tight credit markets and cushion the impact of
the year-long recession. For more details, see
[].
GM's shares were up 11.1 percent at $4.00 in premarket
trading, while rival Ford <F.N> rose 7.2 percent to $2.38.
Peter Cardillo, chief market economist at Avalon Partners
in New York, said that while there could be negative
consequences of the series of bailouts in the long term, it
limited the fallout from the recession in the near term.
"The alternative obviously could be worse, so I think that
maybe the market has finally got it -- we have a short-term fix
and a long-term problem that we can deal with later," said
Cardillo.
S&P 500 futures <SPc1> rose 5.40 points and were above 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> climbed
37 points, and Nasdaq 100 <NDc1> futures added 9.00 points.
The day after Dow Chemical <DOW.N> shares fell sharply on
concerns over its ability to fund the takeover of Rohm & Haas
<ROH.N>, the Financial Times reported Dow could tap a $13
billion bridge loan or renegotiate the price to salvage its $15
billion takeover. [].
Kuwait decided to scrap a joint venture with Dow Chemical
over the weekend, depriving the company of financing it planned
to use for the acquisition. Dow was up 3.3 percent at $15.83
before the opening bell.
Earlier in the month, the U.S. government agreed to throw a
lifeline to GM and Chrysler LLC with up to $17.4 billion in
emergency loans to head off a potential collapse that would
have cost hundreds of thousands of jobs and further hit the
already beleaguered economy.
Shares of retailers could fall as data showed that the
recession, deep discounting by retailers and bad winter weather
combined to produce the worst holiday season since at least
1970. [].
Oil prices fell below $40 a barrel as concerns over the
outlook for global growth overshadowed continuing tensions in
the Middle East.
A jump in oil prices on Monday had boosted energy shares,
limiting declines in U.S. markets that ended lower on concerns
about Dow Chemical's planned takeover of Rohm & Haas. But
higher oil also raised worries of more pressure on already
cash-strapped consumers.
Volume was expected to be light throughout the week
shortened by the New Year's holiday. The broad S&P 500 is down
about 40 percent for the year, making it one of the worst
ever.
(Editing by Tom Hals)
