U.S. Stock Futures Cautious Ahead of Earnings, Data
Published Tuesday, 22nd January 2013 06:53 pm - © 2013 Dow Jones
After a long weekend break, U.S. stock-market futures traded cautiously ahead of Wall Street's open, as investors pored over earnings from DuPont and awaited others. Existing-home sales data, and a regional manufacturing index were also on tap.
Markets were closed Monday for the Martin Luther King Jr. Day.
Futures for the Dow Jones Industrial Average fell 4 points to 13,572. Futures for the Standard & Poor's 500 index rose 1.1 points to 1,480.
Futures for the Nasdaq 100 index edged up 6 points to 2,739.75.
Fawad Razaqzada, market strategist at GFT Markets, said futures markets moved lower earlier after the Bank of Japan announced it will adopt a 2% inflation target and commence an open-ended asset-purchasing program beginning January 2014.
"Everyone was expecting this, so it was a case of buying the rumor and selling the fact," Mr. Razaqzada said. He added that markets also got jittery on speculation that a member of the European Central Bank could be stepping down.
But futures losses eased after the German ZEW economic-expectations index, a gauge of investor sentiment, rose more sharply than expected in January.
But away from global factors, U.S. markets will be focusing squarely on data and earnings to come.
Getting back into the swing of things after Monday's break, investors will be looking out for a read on the housing market, with existing-home sales due at 10 a.m. EST. Economists polled by MarketWatch are expecting sales of 5.10 million for December versus 5.04 million in the prior month.
Ahead of that at 8:30 a.m. EST, the Chicago national activity index will be released.
Earnings season also gets back on track. Du Pont (DD) reported fourth-quarter adjusted earnings on operations of 11 cents versus 26 cents in the year-ago period. Analysts polled by FactSet Research were expecting Du Pont to post fourth-quarter earnings of 7 cents a share. The group posted revenue of $7.57 billion against forecasts for sales of $7.15 billion.
Johnson & Johnson (JNJ) is forecast to turn in earnings of $1.17 a share for the fourth quarter.
After the closing bell, Google Inc. (GOOG) and International Business Machines Corp. (IBM) will deliver results.
"Delta Airlines, IBM and Google are just some of the highlights today, and with many analysts cautious on the outlook for the tech sector, there's every chance that even some modest showings here could initiate further buying," Mr. Razaqzada said.
U.S. stock markets closed out with a third straight week of gains on Friday. Strong earnings news and upbeat news on the debt ceiling also helped sentiment. The S&P 500 index (SPX) rose 5.04 points, or 0.3%, to finish at 1,485.98, its highest close since December 2007. The index rose 1% for the week.
The dollar initially gained around a yen on the Bank of Japan news before pulling back and was weaker across the board. The dollar index, which measures the greenback against a basket of several currencies, fell to 79.801 from 80.046 late on Monday.
Bundesbank President Jens Weidmann, who is also a member at the European Central Bank Governing Council warned in a speech late Monday of a potential "currency war" as central banks pump out cash to support economies, media reports said.
In other markets, gold prices edged higher, while crude-oil for February delivery traded lower.
Write to Barbara Kollmeyer at BKollmeyer@marketwatch.com
HOT STOCKS TO WATCH
Among companies with shares expected to trade actively in Tuesday's session are Caterpillar Inc. (CAT) and SeaCube Container Leasing Ltd. (BOX).
Caterpillar Inc. said it has uncovered accounting misconduct at a unit of China's ERA Mining Machinery Ltd., which the U.S. machinery manufacturer acquired last year. An internal probe at Caterpillar revealed that several managers at Zhengzhou Siwei Mechanical & Electrical Manufacturing Co., or Siwei, engaged in deliberate misconduct beginning several years prior to the acquisition.
Canada's largest single-profession pension plan will acquire SeaCube Container Leasing Ltd. for $23 per share, saying the container leasing company is a good investment fit for the fund. The per-share offer values Park Ridge, N.J.-based SeaCube at about $466.6 million and represents a 13.3% premium to the company's Friday closing price of $20.30.
The U.S. Food and Drug Administration has expanded the approved use of Allergan Inc.'s (AGN) Botox to treat adults with overactive bladders who don't respond to other medications. The regulatory agency said Botox can be used to treat patients who can't use--or don't respond adequately to--a class of medications known as anticholinergics.
Saba Software Inc. (SABA) said it has received notice of its continued noncompliance with its Nasdaq listing after the workplace-management software company delayed filing its financial report for the latest quarter.
Write to Debbie Cai at firstname.lastname@example.org
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