But it is unclear how such a filing by a company that lends to millions of small and mid-size businesses would affect shaky financial markets hobbled by an economy in recession and bleeding millions of jobs a month. Small businesses are seen as keys to economic recovery. CIT said late Wednesday that negotiations with regulators about a possible rescue had broken off after days of round-the-clock talks. The move marked a defining moment for the Obama administration and showed it's drawing a line in the sand on federal rescues for troubled financial firms. The early reaction to the collapse of the talks was subdued.
Futures on the Dow Jones industrial average and the Standard and Poor's 500 index dipped on the announcement. But after a stronger than expected earnings report from JPMorgan Chase on Thursday morning, the Dow Jones industrials and S&P 500 futures edged higher. The muted response to CIT's woes suggests investors are more focused on signs that the economic slump may be easing, said Paul Baiocchi, senior market strategist at Delta Global Advisors in San Francisco.
