* White House to make $17.4 billion available to carmakers
* Japan cuts interest rates almost to zero
* Oil falls to around $34 a barrel
* For up-to-the-minute market news, please click on
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By Leah Schnurr
NEW YORK, Dec 19 (Reuters) - Wall Street was poised to open
flat on Friday even after news the U.S. government will throw a
$17.4 billion lifeline to struggling automakers, while a slide
in oil to near $34 a barrel may hit energy shares again.
U.S. President George W. Bush said a collapse of automakers
would send the economy deeper into recession and would not be a
responsible thing to let happen. For details see
[].
A senior administration official said ahead of the speech
the U.S. government will offer up to $17.4 billion in loans and
expects General Motors <GM.N> and Chrysler LLC to access the
money immediately. [].
A government aid package, however, would require the ailing
automakers to undertake sweeping restructuring, according to
sources familiar with talks on the package. [].
"For several weeks now, the government has indicated
they're going to do anything possible to save the industry,"
said Sal Arnuk, co-manager of trading at Themis Trading in
Chatham, New Jersey.
"They knew they were going to be under tremendous pressure
to save main street automakers. If they're going to save
financial firms with no disclosure and no strings attached,
then they have to at least with some strings attached save our
automakers so this is kind of built into a lot of people's
expectations."
S&P 500 futures <SPc1> were off 1.60 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 <DJc2> were down
12 points, and Nasdaq 100 <NDc1> futures fell 7.50 points.
Energy companies may come under renewed pressure as the
price of oil <CLc1> fell to around $34 a barrel, its lowest in
almost five years, as the global economic downturn obliterated
the effect of OPEC's recent record supply cuts.
Japan was the latest country to aggressively cut interest
rates to just above zero and announced extra steps to fight the
credit crunch that has taken the country into recession.
Late on Thursday, Standard & Poor's lowered the minimum
value required for inclusion in its S&P 500 index for the
second time in nearly three months, underscoring the rapidly
shrinking capitalization of U.S. companies. [].
On the index, 148 companies fall short of the old minimum
market cap of $4 billion, and 106 are still below the new
minimum of $3 billion. There are 202 companies below what had
been the long-standing minimum of $5 billion.
Carmakers have been among companies hardest hit by the
global slowdown. The prospect of one of the three big Detroit
automakers failing has prompted fears over the likely ripple
effect through the industry and the wider economy.
In another sign of headwinds facing the industry, Japan's
Toyota Motor Corp <7203.T> could report its first annual
operating loss at the parent level in 71 years, hit by plunging
sales and a strong yen, Japanese media reported.
Such a loss would not include its subsidiaries. Toyota, the
world's biggest automaker, may also issue a profit warning at a
scheduled year-end news conference on Monday. [].
Japan's central bank lowered its key policy rate to 0.10
percent from an already low 0.30 percent on the heels of this
week's rate cut by the U.S. Federal Reserve. [].
On Thursday, stocks fell for a second day after Standard &
Poor's threatened to strip General Electric <GE.N> of its 'AAA'
rating, and slumping oil prices slammed energy stocks.
(Editing by James Dalgleish)
