flat after two-day decline; Alcoa up early
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[July 09, 2014] By
NEW YORK (Reuters) - U.S. stock index futures
were flat on Wednesday, suggesting that even a positive
early read on earnings was not enough to entice buyers
after a sharp decline from record levels.
The S&P 500 is coming off its biggest two-day slump since mid-May,
with small-cap and "momentum" names - hyper growth stocks largely in
the Internet and biotech space - among the biggest decliners.
Despite heavy losses earlier this year, both groups continue to be
hit by charges that they are overvalued.
Alcoa Inc rose 2 percent to $15.14 in premarket trading a day after
reporting second-quarter adjusted earnings and revenue that topped
While the former Dow component is not considered a market-moving
industry bellwether, the aluminum maker is sometimes viewed as
setting the tone for the season by dint of being one of the first
high-profile names out of the gate. Wells Fargo & Co will report on
Friday, while dozens of closely watched companies, including
numerous Dow components, will come out next week.
S&P 500 profits are seen growing 6.2 percent in the second quarter,
according to Thomson Reuters data, down from the 8.4 percent growth
forecast at the start of April. Revenue is seen up 3 percent.
Analysts are looking to earnings for confirmation that the economy
recovered in the second quarter from the impact of a harsh winter.
S&P 500 e-mini futures fell 0.25 point but 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 e-mini futures fell 10 points, and Nasdaq 100
e-mini futures rose 1 point.
While the Dow closed back below 17,000 in Tuesday's decline, the S&P
recovered from its lows of the session and held near its 14-day
moving average. If the benchmark index had ended decisively below
that level, it would be a sign of weak near-term momentum. The
two-day skid follows a sharp Wall Street rally that took major
indexes to repeated records.
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Citigroup Inc is close to paying about $7 billion to resolve a U.S.
probe into whether it defrauded investors on billions of dollars
worth of mortgage securities in the run-up to the financial crisis,
a source familiar with the matter told Reuters late Tuesday.
A Beijing court has ruled against Apple Inc by upholding the
validity of a patent held by a Chinese company, clearing the way for
the Chinese company to continue its own case against Apple for
infringing intellectual property rights.
Cosmo Pharmaceuticals said it would merge its Irish subsidiary with
Salix Pharmaceuticals, the latest in a wave of overseas deal-making
by U.S. companies looking to lower their tax bill.
(Editing by Lisa Von Ahn)
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