U.S. stock index futures edged up before the start of Wall Street trading on Friday, with the focus on financial groups Merrill Lynch , MBIA and Lehman Brothers .
Only two S&P 500 companies -- natural-gas distributor Nicor and utility company PG&E -- are scheduled to report quarterly earnings, and the economic data diary is thin.
At 1040 GMT, Dow Jones futures were up 0.03 percent, S&P 500 futures crept up 0.04 percent and Nasdaq futures gained 0.2 percent.
The indicative Dow Jones index , which tracks how the Dow stocks trade in Frankfurt, was 0.2 percent lower.
Shares in Merrill Lynch, the world's largest brokerage, traded 3.8 percent lower in Frankfurt at 1040 GMT.
Merrill President and Chief Operating Officer Greg Fleming said in an interview on Thursday that strategic mergers could pick up again in the second half of this year, but that leveraged buyouts might stay in the doldrums until 2009.
MBIA's Frankfurt-listed shares were down 0.9 percent. The world's largest bond insurer on Thursday left the Association of Financial Guaranty Insurers, a trade group, after 22 years citing disagreement over the proper direction for the industry.
Coming days and weeks would "probably bring key decisions that will determine the future of the U.S. monoline insurers. A break-up would mean risks of new write-downs on financial products and, therefore, strains for the equity market," Italian bank UniCredit said in a strategy note.
Shares in U.S. investment bank Lehman Brothers fell 1.8 percent in Frankfurt , with traders in Europe citing market talk of additional writedowns of up to $15 billion.
SUBPRIME LOSSES
Aioi Insurance Co , Japan's fourth-largest non-life insurer, said on Friday it expects to fall into the red this year, with losses on subprime-related investments expected to balloon to about $857 million.
With financial stocks in the spotlight, eyes will also be on the Federal Reserve's announcement due at 1700 GMT of the minimum bid rate for its $30 billion term facility auction (TAF) to be held on February 25.
Federal Reserve Bank of Dallas President Richard Fisher is scheduled to give "An Overview of the U.S. Economy from a Texas Perspective" before the Fort Worth Petroleum Club at 1830 GMT.
Citigroup said in an equity strategy note that recent weak U.S. economic data "is weighing on asset prices, which in turn are making it more expensive for firms to borrow or to invest in expansion."
"This is a dangerous vicious cycle which needs to be broken," Citigroup said, adding that lower interest rates would be necessary to reduce the risk of a drawn-out U.S. recession.
"With further aggressive policy action from the Fed, we suspect that the earliest at which there may be signs of a trough in the U.S. economy is 3-6 months out," said Citigroup, which expects the Fed to cut key rates towards 2 percent over the coming months.
Recession worries contributed to a fall in U.S. stocks on Thursday. The Dow Jones lost 1.2 percent, The S&P 500 slid 1.3 percent and the Nasdaq dropped 1.2 percent.
Only two S&P 500 companies -- natural-gas distributor Nicor and utility company PG&E -- are scheduled to report quarterly earnings, and the economic data diary is thin.
At 1040 GMT, Dow Jones futures were up 0.03 percent, S&P 500 futures crept up 0.04 percent and Nasdaq futures gained 0.2 percent.
The indicative Dow Jones index , which tracks how the Dow stocks trade in Frankfurt, was 0.2 percent lower.
Shares in Merrill Lynch, the world's largest brokerage, traded 3.8 percent lower in Frankfurt at 1040 GMT.
Merrill President and Chief Operating Officer Greg Fleming said in an interview on Thursday that strategic mergers could pick up again in the second half of this year, but that leveraged buyouts might stay in the doldrums until 2009.
MBIA's Frankfurt-listed shares were down 0.9 percent. The world's largest bond insurer on Thursday left the Association of Financial Guaranty Insurers, a trade group, after 22 years citing disagreement over the proper direction for the industry.
Coming days and weeks would "probably bring key decisions that will determine the future of the U.S. monoline insurers. A break-up would mean risks of new write-downs on financial products and, therefore, strains for the equity market," Italian bank UniCredit said in a strategy note.
Shares in U.S. investment bank Lehman Brothers fell 1.8 percent in Frankfurt , with traders in Europe citing market talk of additional writedowns of up to $15 billion.
SUBPRIME LOSSES
Aioi Insurance Co , Japan's fourth-largest non-life insurer, said on Friday it expects to fall into the red this year, with losses on subprime-related investments expected to balloon to about $857 million.
With financial stocks in the spotlight, eyes will also be on the Federal Reserve's announcement due at 1700 GMT of the minimum bid rate for its $30 billion term facility auction (TAF) to be held on February 25.
Federal Reserve Bank of Dallas President Richard Fisher is scheduled to give "An Overview of the U.S. Economy from a Texas Perspective" before the Fort Worth Petroleum Club at 1830 GMT.
Citigroup said in an equity strategy note that recent weak U.S. economic data "is weighing on asset prices, which in turn are making it more expensive for firms to borrow or to invest in expansion."
"This is a dangerous vicious cycle which needs to be broken," Citigroup said, adding that lower interest rates would be necessary to reduce the risk of a drawn-out U.S. recession.
"With further aggressive policy action from the Fed, we suspect that the earliest at which there may be signs of a trough in the U.S. economy is 3-6 months out," said Citigroup, which expects the Fed to cut key rates towards 2 percent over the coming months.
Recession worries contributed to a fall in U.S. stocks on Thursday. The Dow Jones lost 1.2 percent, The S&P 500 slid 1.3 percent and the Nasdaq dropped 1.2 percent.
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