U.S. Stocks To Open Mixed After Strong Week
NEW YORK (MarketWatch) -- U.S. stocks were poised for a mixed opening Monday, as caution kept a lid on prices after strong gains last week, while investors weighed another rise in crude oil prices and waited for key data on new home sales.
Futures for the Dow Jones Industrial Average were down 1 point at 12,566.
Among blue chips, Citigroup Inc. rose in pre-opening trade, after the Wall Street Journal reported that the bank's executives are putting the finishing touches to a restructuring plan that will involve around 15,000 job cuts out of 327,000 employees.
Intel fell 0.6% after saying it will invest $2.5 billion to build a 300-millimeter wafer fabrication facility in China.
United Technologies , another Dow component, was upgraded to outperform from neutral by Credit Suisse on hopes for the company's quality control program.
Futures for the S&P 500 were down 0.10 points at 1,446, while those for the Nasdaq 100 rose 4 points to 1,815.
Among technology leaders, Dell rose 3% in pre-open trade on an upgrade to buy from neutral at Goldman Sachs.
Still, the overall tone is likely to remain cautious on Monday.
"Earnings season will be upon us in two weeks," said Marc Pado, market strategist at Cantor Fitzgerald. "That means we are entering the 'earnings-warning season'."
The market may have trouble to retest its late February highs should earnings fail to provide the necessary catalyst, he said.
Stocks tumbled for several weeks through the middle of March amid concerns that a meltdown in the subprime mortgage market may tighten credit conditions, accentuate the downturn of the housing market, and take down the economy.
Economy in focus
Last week, the Dow industrials finished with a 3.1% climb, and the S&P 500 gained 3.6% and the Nasdaq Composite added 3.2%.
The strong gain came on hope that the Federal Reserve has moved closer to cutting interest rates should the economy weaken too much. Friday also brought an unexpected rise in existing home sales, which helped soothe immediate concerns about the housing market.
At 10 a.m., investors will receive another update on housing, with the release of new-home sales for February
After that, the economic focus will shift to key data on orders for durable goods Wednesday, and comments by Fed Chairman Ben Bernanke to the congressional Joint Economic Committee.
"Investors will look for clarification on the Fed's apparent step back toward neutral," said Pado. "If Bernanke feels the comments were misinterpreted, this would be his opportunity to clarify the statement."
Watching oil, Iran
After ignoring crude oil in recent months, investors have again started to be concerned about rising prices as a barrel convincingly resumed trade above the $60 mark.
Crude-oil futures extended last week's gains on Monday, rising 70 cents at $62.98 a barrel.
The rise came amid further tensions with oil exporter Iran, as the country continues to hold 15 U.K. navy personnel it seized Friday in a disputed waterway. Iran was also further sanctioned by the United Nations Security Council on its nuclear research program.
"Events like this have happened in the disputed waters between Iran and Iraq in the past, but with the U.N. calling for sanctions against Iran for failing to halt its uranium enrichment, this is an issue that could escalate," said Cantor Fitzgerald's Pado.
Rising oil also helped lift gold futures, which were up $3.20 to $660.30 an ounce.
The dollar edged higher against both the euro and the yen.
The Nikkei 225 rose 0.2% in Tokyo trade, and the FTSE 100 also rose 0.2% in London.
Corporate news
Saudi Basic Industries Corp. may bid up to $12 billion for the plastics unit of General Electric , according to a report from the Financial Times. Both private-equity firms and trade companies have expressed interest in he GE division, which was put on the block in January.
Beckman Coulter agreed to buy Biosite for $1.55 billion, or $85 a share. Some analysts frowned on the deal -- Piper Jaffray downgraded Beckman to market perform and Banc of America Securities called the price "lofty."
Biosite shares rallied 50% to $83.12 in pre-open moves.
There was a flurry of deal activity in Europe. E.On lifted its offer for Spanish utility Endesa to $56 billion, as the German utility tries to fend off interest from Enel and Acciona.
Porsche over the weekend launched a takeover bid for Volkswagen after lifting its stake above 30%. But Porsche's offer values VW at a 14% discount to Friday's close.
U.K. home builders Taylor Woodrow and George Wimpey agreed to swap shares in a deal valuing them at $9.8 billion. In North America, the firms will combine their operations in Florida, California, Arizona and Texas.
London-listed miner Xstrata offer C$4.6 billion for LionOre in a friendly deal.
Bayer agreed to buy Novartis multiple-sclerosis drug-making facilities in a $200 million deal.
By Nick Godt