Global Markets Spook U S Investors Futures Plunge

Friday isn't looking good. Stock futures plunged in early trading Friday after the U.K. Government said the British economy had entered into a recession much sharper than originally expected. Global markets were down more than 2% in all countries in both Europe and Asia.

General Electric (GE: 13.459, 0, 0%), a Dow member and one of the most closely-watched companies in the market, reported a 46% in its quarterly profit. The company believes it will see a "difficult" 2009.

The Dow Jones Industrial Average futures were down 137 points, or 1.69%, to 7955 as of 7:20 a.m. in New York, while the broader S&P 500 futures fell 16.4 points, or 1.98%, to 809.10 and the Nasdaq 100 futures fell 27.5 points, or 2.34%, to 1144.75.

The United Kingdom's Office of National Statistics said the British economy contracted 1.5% in the fourth quarter - the sharpest decline in gross domestic product for that nation since 1980. Economists had expected the British economy to contract 1.3% for the quarter.

For the year, the nation's economy contracted 1.8%, compared with economists' predictions of an annual contraction of 1.4%.

The U.K's reeling economy and news of this sharper-than-expected contraction does not bode well for U.S. investors. As a tourism-heavy, service-sector, mature economy, the British economic system is closest in shape and structure to the U.S. economy than any other country. It could mean that U.S. GDP figures, which come out next week, could be uglier than investors had originally predicted.

The global markets tanked on the news. London's FTSE 100 Index was down 1.87% to 3976.62 in the first hours of trading, while Germany's markets were down 2.45% and Paris fell by 2.4%.

Asian markets were not spared from the sell-off. Japan's Nikkei fell by 3.8% overnight while Hong Kong was down 0.6%. Australian markets plunged 4.1%.

Here in the U.S., corporate titan and diversified industrial company General Electric (GE: 13.459, 0, 0%) reported a 46% drop in profit from a year ago to $3.65 billion, or 35 cents a share, compared to 66 cents a share, from a year ago. Excluding one-time charges, GE made a profit of 37 cents a share - in line with analysts estimates, according to data provided by Thomson Reuters.

The drop in profit was primarily attributable to the seizing of credit markets during the last few months of the year, the company said, and it expects 2009 to be "extremely difficult."

Shares of GE were slightly higher on the news.

However, on the positive side, traders have the earnings of Google (GOOG: 302.5531, 0, 0%) to work through. Shares of the search company were up slightly in pre-market trading after the company reported a profit of $382.4 million, or $1.21 a share. Non-GAAP earnings came to $5.10 per share, compared to analyst estimates of $4.95 per share.

In the commodity markets, oil was lower by 76 cents to $42.91. Gold jumped $13.50, or 1.57%, to $872.30 a troy ounce.

On Thursday, the Dow Jones Industrial Average lost 105.30 points, or 1.28%, to 8122.80, the S&P 500 fell 12.74 points, or 1.52%, to 827.50 and the Nasdaq Composite sank 41.58 points, or 2.76%, to 1465.49. The consumer-friendly FOX 50 declined 9.46 points, or 1.50%, to 621.88.

http://www.foxbusiness.com/story/markets/global-markets-spook

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Global Markets Spook U S Investors Futures Plunge