Commodity Crushes: AlCOA Cut 13,500 (-13%) Jobs & Output (-18%)

Posted by Kris | Wednesday, January 07, 2009 | | 0 comments »

NEW YORK (AP) -- Wall Street headed for a lower open Wednesday, sobered by aluminum producer Alcoa Inc.'s decision to slash jobs and production to navigate through the global downturn.

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The announcement was a harsh reminder that the economy both domestically and abroad remains in rough shape. Alcoa said late Tuesday it is reducing its global work force by about 13,500, or 13 percent, by the end of the year and lowering total output by more than 18 percent annually.

The market's economic worries had been calmed a bit in recent days by President-elect Barack Obama's proposal to slash taxes and help businesses. The stimulus package could cost as much as $775 billion, though, and Obama said Tuesday the nation could face trillion-dollar deficits "for years to come."

Ahead of the market's open, Dow Jones industrial average futures fell 57 points, or 0.64 percent, to 8,893. Standard & Poor's 500 index futures fell 5.20 points, or 0.56 percent, to 925.30, and Nasdaq 100 index futures fell 5.75 points, or 0.45 percent, to 1,265.25.

On Tuesday, Wall Street overcame gloomy economic readings to finish with a moderate advance.

Government bond prices retreated in premarket trading Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.49 percent from 2.47 percent late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, edged slightly lower to 0.13 percent from 0.14 percent.

The Treasury plans to auction a record $30 billion in three-year notes on Wednesday.

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

Crude oil prices slipped 27 cents to $48.21 a barrel in premarket electronic trading on the New York Mercantile Exchange.