PARIS (Reuters) – U.S. stock index futures fell on Tuesday, pointing to a lower start on Wall Street as investors awaited details on the banking industry rescue plan when Treasury Secretary Henry Paulson faces the Senate Banking Committee later on Tuesday.
By 0935 GMT, S&P 500 futures SPc2 were down 0.3 percent, Dow Jones futures DJc2 were down 0.3 percent and Nasdaq 100 futures NDc2 were flat.
U.S. lawmakers were haggling over the $700 billion bailout plan aimed at purging banks of bad mortgage-related debt and tackle the U.S. housing crisis.
Negotiations continued about how to make Wall Street pay for the rescue that will let the U.S. Treasury buy up toxic debt from the embattled financial sector, and looked set to drag into next week.
U.S. Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke start two days of congressional hearings on Tuesday to hasten approval of the bailout.
But lawmakers, many also facing elections on Nov. 4, are reluctant to merely rubber stamp the Bush administration’s plan and are at odds with the Treasury over several issues.
“Investors are jittery because details of the plan have still to be announced. Big uncertainties remain on the price that will be paid for the toxic assets,” said Benoit De Broissia, analyst at Richelieu Finance, in Paris.
“And now it looks like the support from congressmen could take a while to get, so we don’t know when the plan will be implemented.”
Growing doubts surrounding the rescue plan weighed on European shares, with the FTSEurofirst 300 index of top European shares losing 1.7 percent at 0935 GMT, with Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) and Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz) losing 4.2-4.9 percent.
Oil dropped $2 a barrel on Tuesday, dragged by worries about the bailout plan and as investors booked profits after an historic one-day jump in the previous session.
U.S. crude for November CLc1 fell $2.62 to $106.73 a barrel by 0941 GMT.
U.S. stocks sank on Monday as investors worried that the banking bailout plan might not resuscitate a slumping economy, while a record spike in oil prices renewed concern about consumer spending.
Economic indicators due for release on Tuesday include the Richmond Federal Reserve Manufacturing Index, while on the earnings front reports due on Tuesday include Lennar Corp (LEN.N: Quote, Profile, Research, Stock Buzz).
On the M&A front, The Wall Street Journal said, citing people familiar with the situation, that Canada’s Toronto-Dominion Bank (TD.TO: Quote, Profile, Research, Stock Buzz) is among the companies now considering whether to bid for Washington Mutual Inc (WM.N: Quote, Profile, Research, Stock Buzz). (Editing by Greg Mahlich)