futures edge lower, investors seek earnings clarity
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[July 08, 2014]
By Ryan Vlastelica
NEW YORK (Reuters) - U.S.
stock index futures edged lower on Tuesday, suggesting a
second day of weakness as investors continued to hold
off from making big bets going into the start of
corporate earnings season.
Alcoa Inc, among the first high-profile names to report, will
release its results after the market closes on Tuesday. The aluminum
maker is seen posting profit growth of more than 50 percent,
according to Thomson Reuters data, along with a 3.6 percent decline
Recent U.S. economic data has been strong, following a dismal start
to the year, and market participants are looking to corporate
earnings for confirmation that the economy snapped back in the
second quarter. Many analysts are especially looking for an
acceleration in revenue growth.
Profits are seen growing 6.2 percent in the second quarter,
according to Thomson Reuters data, a rate that is down from the 8.4
percent growth that had been forecast at the start of April. Revenue
is seen up 3 percent.
Market action may be slight until traders get a better sense of how
the earnings season is shaping up. Wells Fargo & Co <WFC.N> is among
the few S&P 500 companies slated to report later this week, but next
week will see dozens of bellwether names report, including numerous
S&P 500 e-mini futures fell 3 points 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 e-mini futures fell 20 points and Nasdaq 100
e-mini futures lost 3.5 points.
Wall Street had its biggest one-day drop in two weeks on Monday,
falling on light volume as investors took profits ahead of the start
of earnings. Still, the market's uptrend is viewed as intact, and
the Dow held above the psychologically important 17,000 level.
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Groupon Inc. was among the most active premarket movers, rising 3.7
percent to $6.69 after B. Riley upgraded the stock to "buy" from
PetSmart Inc. will be in focus a day after Longview Asset Management
LLC became the latest shareholder calling for the company's board to
consider selling itself, even as the retailer said it was reviewing
potential changes in its capital structure.
(Editing by Chizu Nomiyama)
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