Reply #9: Futures flat on caution about credit

[ozymandius]

NEW YORK (Reuters) - Stock index futures were little changed on Friday after the previous session's sharp sell-off, with investors cautious about the outlook for the U.S. economy and deteriorating credit markets.

Stocks dropped on Thursday after the Federal Reserve chairman said that he sees sluggish economic growth ahead and a credit ratings downgrade of FGIC, the fourth-largest bond insurer. The downgrade could lead to more writedowns at banks that own securities covered by the company.

Shares of Kraft Foods Inc and U.S.-listed shares of UK drug maker GlaxoSmithKline will likely be a bright spot after billionaire Warren Buffett's Berkshire Hathaway Inc said it had taken stakes in the companies. Both stocks were up in Europe.

"Sentiment is guarded. Reality is beginning to set back in that there's no quick fix to this financial mess. We're going to see more write-downs, and the clock is ticking at the bond insurers in terms of a rescue plan," said Matt Kaufler, co-manager of the Touchstone Value Opportunities Fund in Rochester, New York.
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Data on industrial production for January due at 9:15 a.m. could shed more light on how the manufacturing sector is holding up. Reuters/University of Michigan preliminary data on consumer confidence for February follows at 10 a.m.

http://news.yahoo.com/s/nm/20080215/bs_nm/markets_stocks_dc