(Updates with Wachovia falling after CEO's departure, GM
rising, Harris lower, updates prices)
*Futures hit by UK mortgage lender loss, forecast
*U.S. financial stocks seen opening lower
*Wachovia down after CEO ouster, GM up before the bell
By Walker Simon
NEW YORK, June 2 (Reuters) - Wall Street looked set to
open lower on Monday, with U.S. financial stocks under pressure
as a major UK lender reported a loss and gave a bleak outlook
for the British mortgage market, signaling more trouble for
global credit markets.
Shares of Bradford & Bingley <BB.L> sunk 26 percent in
London after the mortgage provider slashed the price of
emergency fund-raising, hitting bank shares across Europe.
European stocks <> fell more than 1 percent, ending a
three-session rally and marked by major losses by some banks.
U.S. bank J.P Morgan Chase & Co <JPM.N> declined more than
2 percent in European trading.
"I think the headline risk is with the financial sector.
It's always a gut check if you get the negative news like that
of Bradford," said Rich Parker, head of trading at Stanford
Group in New York. "I think this is a reminder the subprime
mess and the credit squeeze is not behind us."
S&P 500 futures <SPc1> were down 6.8 points, below fair
value, a mathematical formula that evaluates pricing by taking
into account interest rates, dividends and time to expiration
on the contract. Dow Jones industrial average futures <DJc1>
fell 57 points, while Nasdaq 100 <NDc1> futures fell 7 points.
Bradford & Bingley said it expects the British mortgage
market to deteriorate and said U.S. private equity firm TPG
Capital -- also known as Texas Pacific - agreed to take a 23
percent stake in the bank.
Shares of Wachovia Corp, <WB.N> the No. 4 U.S. bank, also
fell 2.5 percent to $23.30 before the open after the bank
announced it ousted its chief executive over what it termed as
"disappointments," including the purchase of a big mortgage
lender at the height of the U.S. housing boom.
On the plus side, shares of General Motors <GM.N> rose more
than 3 percent before the bell on Monday after the weekly
business newspaper Barron's said shares of the U.S. automaker
could triple over the next few years. For details, see
[].
In other company news, shares of Harris Corp <HRS.N> fell
on Monday after the defense communications and information
technology company said it is not for sale and is not pursuing
a merger. []. Harris shares dropped 13 percent to
$57.25.
On Monday's economic data calendar, the Institute for
Supply Management is due to report its manufacturing index for
May at 10 a.m. (1400 GMT). Economists polled by Reuters gave a
median forecast of a decline to 48.5 from 48.6 in April. A
reading below 50 signifies a contraction.
Oil <CLc1> fell $1.65 to $126.60 a barrel on Monday as the
U.S. dollar edged up and traders shrugged off Tropical Storm
Arthur, which marked the start of the Atlantic hurricane season
by shutting two Mexican oil ports.
Stocks ended mixed on Friday, but for the week, the Dow
ended up 1.3 percent, while the Nasdaq climbed 3.2 percent and
the S&P 500 gained 1.8 percent.
(Editing by Kenneth Barry)
