AP
Stock Futures Point to Higher Open
Thursday August 23, 8:23 am ET
By Joe Bel Bruno, AP Business Writer
Wall Street Appears Headed to Higher Open As Credit Worries Ease at Countrywide
NEW YORK (AP) -- Stock futures pointed to a higher opening Thursday, with some investors relieved that troubled mortgage lender Countrywide Financial Corp. will receive a $2 billion capital infusion to help contain its problems.
Bank of America Corp. announced late Wednesday it will invest the money in the nation's largest mortgage lender to help it better weather problems in the global credit markets. The investment was seen as a way to not only prop up Countrywide, but also prevent any further losses at the mortgage lender from hurting the underlying economy.
The move may reassure investors that the mortgage and credit crisis is easing, although a number of major banks and home lenders continue to face difficulties. On Wednesday, Lehman Brothers Holdings Inc. said it would close its BNC Mortgage unit and slash 1,200 jobs; HSBC Holdings PLC and Accredited Home Lenders Holding Co. also said they would eliminate jobs.
U.S. stocks rose Wednesday, lifting the Dow Jones industrials 145 points after Bank of America, Citigroup Inc., JPMorgan Chase & Co., Deutsche Bank AG, and Wachovia Corp. said they borrowed money from the Federal Reserve to help reassure markets. Borrowing money from the central bank is usually seen as a negative action by banks, but the move was designed to bolster the financial system after the Fed cut its discount rate last week.
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Whew!