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Crude rose more than 1 percent, shrugging off Sunday's failed
talks among producers to tackle a global glut. [O/R]
A recent rebound in crude, some signs of a slow recovery in the
U.S. economy and the Federal Reserve's caution over raising
interest rates have helped stocks rally in the last two months.
On Monday, the Dow Jones industrial average closed above the
18,000 mark for the first time since July. The S&P 500 closed
just 40 points below the record high it touched last May.
However, traders seemed cautious about the sustainability of
higher oil prices.
"Really, it's like a party that's gone on for too long. It just
takes one little thing to happen and the party breaks up and
people run out like roaches," said Phil Davis, chief executive
of PSW Investments.
Poor earnings from Dow components IBM and Goldman Sachs
threatened to push back the index below 18,000, he added.
Goldman Sachs <GS.N> shares were down 1.4 percent at $156.85 in
premarket trading after the bank's profit fell for the fourth
straight quarter.
IBM <IBM.N> fell 3.9 percent to $146.63 after it reported its
worst quarterly revenue in 14 years.
At 8:32 a.m. ET, Dow e-minis <1YMc1> were up 45 points, or 0.25
percent, with 37,631 contracts changing hands. S&P 500 e-minis
<ESc1> were up 8.75 points, or 0.42 percent, with 223,731
contracts traded. Nasdaq 100 e-minis <NQc1> were up 29.25
points, or 0.64 percent, on 29,399 contracts.
While U.S. corporate earnings are seen as a swing factor for the
stock market, expectations are bleak.
First-quarter earnings at S&P 500 companies are expected to fall
7.7 percent on average, and revenue by 1.3 percent, according to
Thomson Reuters I/B/E/S.
Netflix <NFLX.O> shares were down 8.6 percent at $99.05
premarket after the video streaming service's subscriber
forecast missed estimates.
Harley-Davidson <HOG.N> rose 6.1 percent to $49.80 after the
motorcycle company's results beat estimates.
Data on Tuesday showed U.S. housing starts fell more than
expected in March, suggesting some cooling in the housing market
in line with signs of a sharp slowdown in economic growth in the
first quarter.
The weak data could add to expectations that the U.S. Federal
Reserve would remain cautious on raising interest rates.
(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Don
Sebastian)
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