Wednesday, February 11, 2009

US STOCKS-RIM's outlook, bank plan dismay weigh on futures

* RIM outlook weighs on techs;stock off before market open

* Dismay over U.S. financial rescue plan persists

* For up-to-the-minute market news, click [STXNEWS/US]

By Ellis Mnyandu

NEW YORK, Feb 11 (Reuters) - U.S. stock index futures dropped on Wednesday as a disappointing financial outlook from Research In Motion (RIM.TO)(RIMM.O) added to concerns about the impact of the recession on consumer and business spending.

But aside from the tech sector unease, worries persisted about the failure of U.S. Treasury Secretary Timothy Geithner on Tuesday to instill confidence about a reworked plan to shore up the beleaguered financial sector.

Shares of RIM, the BlackBerry devices maker, dropped 6 percent to $53.58 before the bell, a slide that also weighed on other tech bellwethers, including Apple Inc (AAPL.O) , down 2 percent.

Investors were dismayed by the lack of detail on how the government will cleanse toxic assets burdening the banking system, triggering a sharp Wall Street sell-off and a nearly 14 percent slide in the KBW Bank Index .BKX on Tuesday.

"The market is headed lower because there's just no confidence," said Peter Cardillo, chief market economist at Avalon Partners in New York.

"After the Geithner massacre, the likelihood of the market turning around in the short term is unlikely. The financial stability plan was nothing new. It still leaves the question of toxic assets, how you cleanse them, unanswered."

S&P 500 futures SPc1 fell 0.90 points and were about even with 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 DJc1 were unchanged, and Nasdaq 100 NDc1 futures declined 2.50 points.

Research In Motion said its fourth-quarter earnings and gross margin would be at the low end of its previous forecast range, even as subscriber additions topped expectations. For details, see [ID:nN11352604] (Editing by Chizu Nomiyama)

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