(Adds Countrywide's posting a loss, report on foreclosures,
updates prices)
By Ellis Mnyandu
NEW YORK, April 29 (Reuters) - U.S. stocks were poised to
slip at the open on Tuesday after Merck & Co Inc <MRK.N> , a
Dow component, suffered a second setback as regulators rejected
its latest cholesterol drug and before data on consumer
confidence.
Investors were also wary before the start of the Federal
Reserve's two-day meeting to decide the level of interest rates
and give the central bank's outlook for the economy as signs of
recession mount. No announcement is expected until Wednesday.
Disappointment with comments on the outlook given by Visa
Inc <V.N>, the credit card company network, and near-record
crude oil prices added to the negative tone, along with news of
a surprisingly large quarterly loss from mortgage lender
Countrywide Financial Corp <CFC.N>.
"There's too much current bad news, particularly with
respect to energy and housing, to allow the market to break
upward," said Rick Meckler, president of investment firm
LibertyView Capital Management in Jersey City, New Jersey.
S&P 500 futures <SPc1> fell 2 points and were about even
with fair value, a formula to evaluate pricing by taking into
account interest rates, dividends and time to expiration on the
contract.
Dow Jones industrial average futures <DJc1> shed 33
points, and Nasdaq 100 futures <NDc1> declined 4.5 points.
Demonstrating the resistance facing the broad market, the
benchmark S&P 500 <.SPX> briefly rose above 1,400 but has
failed to finish above the psychologically important level
since mid-January. Such a move upward would potentially fuel a
breakout to the upside in the near term, analysts said.
Shares of Merck slid 7.2 percent to $38.45 before the bell
following the Food and Drug Administration's rejection of the
company's drug designed to raise the level of HDL, or "good"
cholesterol. It was another blow for Merck amid a controversy
over the effectiveness of cholesterol drugs it sells jointly
with Schering-Plough Corp <SGP.N>. For details, see
[] At least two brokerages cut their price targets
on Merck.
Executives at Visa said the economy could weigh on its
future results even if it does not seem to be affecting payment
volumes so far. Shares of Visa declined 1.7 percent to $74.29
before the bell.
Shares of Countrywide, which is in the process of being
bought by Bank of America Corp <BAC.N>, the No. 2 U.S. bank,
declined 3.8 percent to $5.61 before the bell.
Bank stocks were also poised to be another drag on the
market after Deutsche Bank <DBKGn.DE><DB.N> suffered its first
quarterly loss in five years and wrote down $4.2 billion for
credit losses.
In the latest signs of more housing trouble, U.S. home
foreclosure filings jumped 23 percent in the first quarter from
the prior quarter, and more than doubled from a year earlier,
as more overextended borrowers failed to make timely payments,
according to real estate data firm RealtyTrac. [].
Countrywide said 35 percent of subprime borrowers were behind
on payments as of March 31.
A reading of consumer confidence for April is set for
release at 10 a.m. (1400 GMT).
(Editing by Kenneth Barry)
