Futures flat as Honeywell, Aetna spark caution
Stock index futures were little changed on Monday as reduced outlooks from diversified manufacturer Honeywell Inc
Honeywell shares fell 2.4 percent to $33.18 before the bell after the company cut its full-year profit forecast to the bottom of its prior range.
No. 3 U.S. health insurer Aetna cut its full-year earnings outlook due to higher-than-projected medical costs and posted a 28 percent drop in second-quarter net income. The stock slid 12 percent to $23.30.
With the broader market up nearly 45 percent since it hit 12-year lows in early March, some investors were likely to book profits as they reassess the sustainability of the latest run-up.
Honeywell said the outlook remains cloudy, setting the stage for a mixed session today, said Peter Cardillo, chief market economist at Avalon Partners in New York. The market has come up rather sharply, so obviously it is poised for some profit-taking.
S&P 500 futures shed 2.20 points and were about even with 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 rose 4 points, and Nasdaq 100 futures fell 2.50 points.
Boeing Co In other earnings-related news, Verizon Communications Inc Verizon shares initially rose 7 percent to $31.90, but the bounce quickly faded, sending the stock to nearly unchanged. New home sales data is due at 10 a.m. EST. All three major U.S. stock indexes recorded a second consecutive weekly gain last week. Since hitting multi-year lows in early March, the S&P 500 has jumped 44.8 percent, the Nasdaq has surged almost 55 percent, and the Dow has risen about 39 percent. (Reporting by Ellis Mnyandu; editing by Jeffrey Benkoe)
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