US stocks head for lower open; bank woes continue

NEW YORK - U.S. stocks headed for a lower open Friday as investors watched oil prices rebound and digested a slew of bad news about the beleaguered financial services industry.

Light, sweet crude oil futures rose $2.70 to $134.63 a barrel in premarket electronic trading on the New York Mercantile Exchange, after a fuel price hike in China caused oil to drop by $5 a barrel on Thursday.

Investors are awaiting this weekend's meeting in Saudi Arabia of oil producers and consumer nations, which could bring some solutions to the problem of soaring oil prices. But many analysts believe the gathering might end up being a mere finger-pointing session.

Meanwhile, Merrill Lynch reportedly slashed its earnings estimates for regional banks Friday. The decision comes after Moody's Investors Service late Thursday downgraded on the two biggest bond insurers — MBIA Inc. and Ambac Financial Group Inc. — from "AAA" amid ongoing concerns about their financial health.

The Moody's move was widely expected — the ratings agency had already warned of a possible downgrade, and followed similar actions by rival agencies Standard & Poor's and Fitch Ratings. But it nevertheless underscored the troubles that the nation's money centers face. On Thursday, Citigroup Inc.'s chief financial officer warned Thursday about more significant write-downs at the U.S. bank with the most assets, and Washington Mutual Inc. announced it was cutting 1,200 jobs nationwide, mostly in California and Florida.

Dow Jones industrial average futures on Friday fell 66, or 0.54 percent, to 11,978. Standard & Poor's 500 index futures fell 9.40, or 0.70 percent, to 1,332.20. Nasdaq 100 index futures fell 12.50, or 0.63 percent, to 1,978.00.

Although the sharp drop in oil prices Thursday allowed for a modest stock advance, the Dow is still down about 230 points for the week.

Bond prices rose ahead of the market's open. The yield on the benchmark 10-year Treasury note, which moves opposite its price, dipped to 4.15 percent from 4.21 percent late Thursday.

The dollar fell against other major currencies, while gold prices rose.

Overseas, Japan's Nikkei stock average dropped 1.33 percent. In afternoon trading, Britain's FTSE 100 fell 1.1 percent, Germany's DAX index declined 1.32 percent, and France's CAC-40 fell 1.14 percent.

(Agencies)