Wall St set to dip on company results, caution
Stocks headed for a lower open on Tuesday as a handful of companies, including Office Depot Inc , posted disappointing quarterly results and investors turned cautious before key data on home prices and consumer confidence.
Although the primary focus remains on second-quarter earnings, investors are eager for economic data, including Tuesday's Standard & Poor's/Case Shiller home price indexes, to provide further evidence of a recovering U.S. economy to justify a further run-up in stocks.
Office Depot, the No. 2 U.S. office supply retailer, reported a bigger-than-expected quarterly loss as the recession hurt demand from corporate customers. Office Depot shares fell 16 percent to $4.50 before the bell.
Viacom Inc , owner of MTV Networks and Paramount film studios, reported a steep fall in quarterly earnings, hit by poor advertising revenue and a drop-off in sales of its Rock Band video game.
So much of this rally has been about the absence of new bad news, said Rick Meckler, president of investment firm LibertyView Capital Management in New York.
I think there will be a lot of focus on the Case-Shiller home prices report later this morning. For this rally to really continue there has to be a shift to some actual positive forecasts and significantly good news.
S&P 500 futures were 6.20 points lower and were below 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 shed 46 points, and Nasdaq 100 futures slipped 5.25 points.
The benchmark S&P 500 <.SPX> has rallied 45 percent from the 12-year closing low of March 9 as investors bet on an economic rebound.
Standard & Poor's releases its S&P Case/Shiller Home Price Indexes for May at 9 a.m. EST (1300 GMT). Economists in a Reuters survey expect a decrease in the 20-city home price index of 0.5 percent versus a 0.6 percent fall in April.
The Conference Board releases July consumer confidence, 10 a.m. EST (1400 GMT). Economists in a Reuters survey expect a reading of 49.0 compared with 49.3 in June.
Bank of America Corp is among stocks to watch after the Wall Street Journal reported that the U.S. bank was planning to cut its 6,100-branch network by about 10 percent.
General Electric Co , in its second big investor briefing of the year on its finance arm, said most of GE Capital's portfolio was performing as expected, but below the Federal Reserve's 'base case' for the economy. GE shares fell 1.1 percent to $12.19 in premarket trading.
In Monday's trading U.S. stocks rose slightly in a late rally as investors rotated into financial shares, which had lagged in the recent two-week run-up.
(Editing by Padraic Cassidy)
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