U.S. Markets To Open Higher As Earnings Season Begins
NEW YORK (MarketWatch) - U.S. stocks are set to pop a bit higher at Monday's opening, as investors hold out hopes that second-quarter earnings reports will be solid, although the advance could be limited by concerns about energy prices.
Alcoa Inc. , traditionally the first Dow component to release its earnings, will issue its report after the close of trade.
The futures contract for the Dow Jones Industrial Average last was up 12 points at 13,720.
Futures contracts for the S&P 500 and the Nasdaq 100 were 0.60 point higher at 1,543.10 and up 0.5 point at 2,009.5.
On Friday, major averages all closed higher, after gains in the energy sector offset concerns about rising bond yields in the wake of Friday's employment report.
On Monday investor's attention will turn to earnings. Strategists are predicting that profits of the largest U.S. companies most likely increased at a slower pace in the second quarter, constrained by rising interest rates and weakness in the auto and housing sectors.
"I would suspect we will get a mixed session, as the market awaits earnings reports," said Peter Cardillo, chief U.S. economist at Avalon Partners.
The sole economic report of the day is the Federal Reserve's consumer credit report for May, due at 3 p.m. The MarketWatch forecast, based on a poll of economists, is that consumer credit shot up to $7.7 billion in May from $2.6 billion in April.
The consumer credit data excludes home mortgages, but includes credit cards and other types of revolving credits.
Stocks on the move
Shares of Alcoa were 0.6% higher at $41.90 in premarket electronic trade. The aluminum producer's report is expected to benefit from demand in the aerospace sector, which should compensate for weakness from U.S. housing.
Boeing Co. , also a Dow component, was 1.3% higher at $100.13 before the bell. Over the weekend the company unveiled its 787 Dreamliner and received orders for the plane from Air Berlin and Aviation Lease and Finance Company of Kuwait and an increased order from Qantas Airways.
Another Dow component, Home Depot Inc. was upgraded to buy from neutral at Goldman Sachs. The broker cited changes in management and culture as well as an improved business mix and capital structure.
Investors in the Chicago Board of Trade are due to vote on whether to accept a sweetened offer from the Chicago Mercantile Exchange . The Wall Street Journal reported that the Intercontinental Exchange won't raise its offer for the Chicago Board of Trade.
Before the opening, CBOT Holdings stock was 2 cents higher at $224.02.
In other merger news, Marshall & Ilsey is buying First Indiana for $32 a share. The stock Friday closed at $22.05 a share. The Carlyle Group agreed to pay $2.7 billion for Sequa Corp. , a diversified manufacturer.
Shares of Lexmark International fell 10.9% in pre-open trade after it warned over second- and third-quarter earnings, blaming weaker-than-forecast sales of inkjet supplies and pricing.
Alnylam Pharmaceuticals will receive payments of $331 million upfront and up to $1 billion in milestones from Roche Holdings in return for a license to Alnylam's platform for RNA interference therapeutics. The stock was 55% higher at $23.50 before the opening.
Sony Corp. cut the price of its PlayStation 3 game console by $100 to $499. The stock rose 0.6% to $53.45 before the bell.
Other markets
Treasurys were higher in early trade, pushing yields below recent highs. Lower yields should reassure stock market investors. The benchmark 10-year Treasury note last was up 6/32 at 94-30/32 with a yield of 5.161%.
Oil prices remained above $72 a barrel, which could put pressure on stocks. The August crude futures contract last was 24 cents lower at $72.57 a barrel.
However, gold was trending higher, benefiting from dollar softness. The August gold contract was u$9 at $663.80 an ounce.
The dollar was little changed from its late Friday. Overall the dollar in recent weeks has been weakened by widespread perception that foreign rates are moving higher, while the U.S. fed funds rate is likely to remain stalled at 5.25% for the foreseeable future.
The dollar last was up 0.09% at 123.43 yen, the euro down 0.02% at $1.3621, and the pound sterling up 0.2% at $2.0144.
By Leslie Wines