* Potential bankruptcy for GM weighs
* Private sector job losses accelerate
* Futures down: S&P off 10.40 points, Dow 89, Nasdaq 17.75
* For up-to-the-minute market news click []
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By Leah Schnurr
NEW YORK, April 1 (Reuters) - Wall Street was set for a
lower open on Wednesday on news that struggling automaker
General Motors could be headed for bankruptcy and data showing
job losses in the U.S. private sector accelerated in March.
Market watchers were also focused on the G20 summit in
London as leaders of the world's top economies meet to tackle
the global economic crisis.
Private sector job losses rose more than expected, ADP
Employer Services data showed, adding to jitters ahead of the
March government nonfarm payrolls report due on Friday. For
more see [].
"This continues to drag on and get worse, and I think this
is a prelude to Friday's bigger unemployment number," said Joe
Saluzzi, co-manager of trading at Themis Trading in Chatham,
New Jersey.
"Unemployment is something that has been on the back
burner, as people worry about General Motors and General
Electric, but it's going towards double digits, and that is
going to put a crimp into any plans the government has. You're
seeing the market react to that now."
Shares of GM <GM.N> were flat in the premarket after
trading lower following a New York Times report that the Obama
administration is seeking to ease GM into a "controlled"
bankruptcy by persuading some creditors to agree to a plan that
would split the company into two pieces. []
S&P 500 futures <SPc1> fell 10.40 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 89
points, and Nasdaq 100 <NDc1> futures gave up 17.75 points.
Still ahead in the day's round of economic data are
readings on ISM manufacturing and pending home sales.
General Motors denied a report in London's Financial Times
that it had approached the British government to discuss a 600
million pound ($859 million) aid package for its Vauxhall
marque. []
On Tuesday, GM said there was a rising chance it could file
for bankruptcy by June. The comments came on the heels of the
ouster of GM Chief Executive Officer Rick Wagoner and details
of the U.S. administration's plans limiting taxpayer funds for
automakers.
Analysts worry about what a bankruptcy in the auto sector
would mean for the wider U.S. economy and fallout on
unemployment and other companies in the industry.
"It's hard medicine that GM is going to have to take," said
Arthur Hogan, chief market analyst at Jefferies & Co in Boston,
but he noted that a "controlled" bankruptcy could save jobs and
keep the auto industry alive.
While U.S. President Barack Obama played down differences
between Group of 20 leaders, Germany and France demanded tough
action rather than weak compromises, highlighting the
difficulties in reaching an accord on staving off recession and
tightening regulation. []
Shares of Boeing <BA.N> fell 2.9 percent to $34.54 before
the bell after Wachovia Capital Markets cut its rating on the
commercial aerospace sector, including Boeing, to "market
perform", citing expectations of lower aircraft deliveries
starting next year. []
On Tuesday, stocks ended the quarter on a high note with
the S&P 500 racking up its best month since October 2002 as
investors snapped up top-performing bank and technology
shares.
(Additional reporting by Ryan Vlastelica; Editing by James
Dalgleish)
