Stocks On Wall Street To Open Lower As Oil Tops $125 A Barrel

New York, NY (AHN) - Stocks on the Wall Street are set to decline during the early trading hours as oil futures surges close to $126 a barrel mark in electronic trading in New York.

Prices of the crude oil for June delivery traded to another record level above $125 a barrel mark in New York over the rising concerns about the potential decline in the U.S. stock piles, negative sentiment amongst traders and rising cost of gasoline as well as food production.

Oil climbed to $125.98 a barrel, before it retreated to $125.55 a barrel or $1.86 higher on Friday morning. Oil futures have already climbed around $10 this week.

At 8:40 a.m. EDT in New York, Standard & Poor's 500 Index futures was retreating by 5.11 points or 0.37 percent at 1,397.68 points, Dow Jones Industrial Average futures was adding by 52.43 points or 0.41 percent at 12,866.78 points.

At the same time, NASDAQ- 100 Index futures was increasing by 12.75 points or 0.52 percent at 2,451.24 points.

Additional pressure on the investors in New York can come from the negative earnings reports in the financial sector indicating that the subprime market may still be weak.

American International Group Inc. (AIG), the world's largest insurer by assets, led the drop in the financial sector in European markets on Friday.

New York-based AIG stocks plunged in Germany by as much as 6.8 percent to $41.13 after it reported that the firm requires to raise additional $12.5 billion.

The insurer reported its first quarter net loss late on Thursday of $7.81 billion, while exposing $15 billion in pre-tax writedowns.

The earnings quarterly report also attracted downgrading of the company's credit grades by Standard & Poor's and Fitch Ratings.

"The AIG news suggests that the financials are still not through the woods," Chirin Gill, a fund manager at Daiwa SB Investments in London, which has about $60 billion, told Bloomberg.

"A crisis of confidence in the sector will remain until negative news flow subsides and there is more clarity on the financial position of these companies."

Another report from Citigroup indicated that the firm is planning to sell around $400 billion of its non-core assets to cut costs and retain capital growth of the company. Shares of the firm shed 45 cents to $23.85.

In economic readings on Friday, a report on the March U.S. trade gap will be released, which is expected to narrow to $61.3 billion from $62.3 billion in February.

The market analysts project that the trade deficit will contract led by the weakening dollar, reduction in the demand for imported goods including oil and increased exports of machinery and food.

Shares of Priceline.com Inc. surged by as much as $17.72 to $141.50 after the company reported that its full-year net income could be as much as $5.65 a share, beating the analysts' expectations.

In global markets, stocks in European markets continue to suffer on Friday due to negative sentiments arising from the financial, commodities as well as pharmaceutical sectors.

Earnings from the companies including financial firms have affected the sentiments of the investors as some analysts said that the earnings expectations are still too high.

Meanwhile, Asian stocks closed down for the third day on Friday led by the worries of weakening subprime market after AIG news, which pushed the shares of banks down, and the rising oil prices added to fears of increasing global food crisis.