Stock futures signal lower open on recession fears

By Leah Schnurr

NEW YORK (Reuters) - Wall Street looked set for a lower open on Wednesday, as mounting concern that the global economy is hurtling toward recession diminished investors' appetite for risk, sending world markets plunging.

Uncertainty about the profit outlook weighed on sentiment despite more signs that the costs for banks to borrow from each other continued to fall.

Markets in Europe and Asia slid sharply as they were also hurt by worries of a recession, as well as falling commodity prices.

Boeing posted a profit decline after a strike by its plane assembly workers evaporated nearly a month of production. The company offered no new outlook. Shares of Boeing fell 2.1 percent to $45.41 before the bell.

AT&T Inc reported profit that missed expectations, but revenue was in line with Wall Street's forecast as the largest U.S. phone company added mobile phone subscribers.

"We started the week off in good spirits about the credit market loosening up, and then the onslaught of earnings hit us yesterday and today," said Arthur Hogan, chief market analyst, Jefferies & Co.

"I get the feeling this is going to be a pretty sloppy earnings season even if we had ratcheted expectations down. The real problem is everyone is expecting to get some guidance and guidance is either lackluster or terrible."

S&P 500 futures fell 31.10 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures slid 235 points, and Nasdaq 100 futures were down 23.50 points.

Japan's Nikkei fell nearly 7 percent overnight, while in Europe, benchmark indexes were down more than 4 percent. The price of oil fell below $70 a barrel on concerns that a sour global economic outlook could limit the impact of any supply cuts that could come out of OPEC's Friday meeting.

But McDonald's, the world's largest hamburger chain, beat expectations as it was boosted by strong sales in the United States and abroad.

Apple also reported a stronger-than-expected rise in quarterly profit after the closing bell on Tuesday but issued forecasts for the fourth quarter that were below Wall Street's expectations. Apple gained nearly 10 percent to $100.44.

Wachovia Corp posted a $23.9 billion quarter loss, a record for any U.S. lender in the global credit crisis.

Shares of SanDisk skidded more than 25 percent to $11.01 before the bell after Samsung Electronics withdrew its $5.9 billion unsolicited bid for the company.

(Additional reporting by Ellis Mnyandu; Editing by Kenneth Barry)