Wall Street set to open up as earnings pace quickens
Stocks were poised for a higher open on Monday, signaling the S&P 500 would bounce back from its worst one-day drop since June 29 on Friday, as earnings season kicks into high gear.
Quarterly earnings have been put under a microscope as investors search for clues on the strength of the economic recovery in light of disappointing economic data. On Friday, U.S. stocks slid after dismal consumer sentiment data and anemic revenues from GE and two big banks.
This week, 12 Dow components and 122 S&P 500 companies are set to report quarterly results.
On the banks, there was a lot of discussion of the fact they were trimming the loan loss reserve to meet the numbers. But a lot of the firms coming up in the coming weeks are not going to have that issue, so we will really get a feel for where the economy is at, said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
We've had a lot of bad economic numbers, a lot of uncertainty, and we are looking for some bright spots, Jankovskis added.
S&P 500 futures rose 2.7 points and were above 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 gained 40 points, and Nasdaq 100 futures added 4.75 points.
BP Plc has spent nearly $4 billion on efforts to fight the oil spill in the Gulf of Mexico and aims to permanently kill the well that exploded and leaked during the first half of August. U.S.-listed BP shares were off 2.4 percent to $36.20.
Halliburton Co , which performed work on the well, reported an 83 percent jump in second-quarter profit on Monday on strong U.S. onshore drilling, but a ban on deepwater activity in the gulf is expected to hurt full-year results. Halliburton jumped 5 percent to $28.89.
Hasbro Inc reported higher-than-expected profit on Monday as tight cost controls offset tepid sales. Shares shed 3.1 percent to $38.28 premarket.
Microsoft Corp edged up 0.6 percent to $25.04 after UBS raised its estimates, citing early signs of a return in enterprise demand. The maker of the Windows operating system is set to report earnings on Thursday.
After the closing bell, technology bellwether International Business Machines Corp will report and analysts said it is in danger of missing the average revenue estimate as the weaker euro dents sales in Europe. Texas Instruments Inc is also due to report.
Nokia Siemens Networks, a 50-50 joint venture of Nokia and Siemens , will buy Motorola's telecommunications network equipment business for $1.2 billion, gaining a stronghold in the North American market and rising to No. 2 in the cutthroat mobile gear market.
Motorola shares advanced 1.6 percent to $7.62 premarket.
Later Monday, the NAHB Index, measuring sentiment on home building, will be released and is set to fall to 16 for July from 17 in June, according to a Reuters poll.
Boeing Co will announce a significant number of orders for new airplanes in the next couple of days, the chief executive of its commercial airplanes division said. The company has also taken an order for 30 777 wide-bodies from Dubai-based-Emirates. Shares rose 2.3 percent to $63.30.
(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)
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