Wall St. set to slide on global rout, bank woes

NEW YORK (Reuters) - Stocks headed for a slide at the open on Friday, with the benchmark S&P 500 poised to sag below the 900 mark, as fears that tighter credit may send the global economy into recession sliced into appetite for risk.

Investors unloaded stocks around the world, sending markets in Asia and Europe into a tailspin, a day after Wall Street sank for a seventh straight session.

General Electric , an economic bellwether and a Dow component, posted a quarterly profit slide that matched its recently cut forecast, underscoring the impact of the credit crisis on the company's finance arm GE Capital. Shares of GE fell 3.4 percent to $18.40 in choppy trade before the bell.

Shares of Morgan Stanley , a securities firm turned into a bank holding company, plunged 30 percent to $8.66 after ratings agency Moody's warned it might cut the company's long-term debt ratings and those of rival Goldman Sachs.

Goldman Sachs shares slid 16.9 percent to $84.20 before the bell. Investors worry that a cut in ratings would further complicate the companies' ability to raise capital.

"The panic and the fear we're seeing is mind blowing. It looks like the market is pricing in a depression," said Matt McCall, president of Penn Financial Group in Ridgewood, New Jersey. "There's a lack of confidence in not only the global economy but in the leaders as well."

S&P 500 futures dropped 33.50 points and were below 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 slid 279 points, and Nasdaq 100 futures shed 28.25 points.

In a bid to calm jittery investors General Motors Corp said bankruptcy was not an option as it grapples with "unprecedented challenges" spawned by uncertainty in the financial markets. Even so, GM shares reversed an earlier pop to trade 3.5 percent lower at $4.59 before the bell.

A pullback in the cost for banks to borrow overnight dollars from, or among, each other tempered some market anxiety but the cost to borrow dollars over three months shot higher again, indicating credit markets effectively remain jammed up.

In Asia Japan's Nikkei <.N225> tumbled 9.6 percent, while in Europe major indexes traded down more than 7 percent.

President George W. Bush is due to make a statement at about 10 a.m. (1400 GMT) to reassure Americans that every action is being taken to stabilize the financial system.

U.S. stocks plummeted for a seventh session on Thursday as investors bet recent moves by authorities worldwide to thaw frozen credit markets would not be enough to avert recession.

An avalanche of selling at the close left the Dow below 8,600 for the first time since May 2003, and down almost 40 percent from its record closing high hit exactly one year earlier. The Nasdaq and the S&P 500 also fell to levels not seen in more than five years.

(Editing by James Dalgleish)

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