- Pre-Market Indications

Friday, January 22, 2010

Indications: U.S. stock futures nudge up after rout

Stock Assault 2.0 - Artificial Intelligence Stock Market Software Alert Email Print

By Barbara Kollmeyer, MarketWatch

MADRID (MarketWatch) -- U.S. stock futures were pointing higher on Friday, as investors turned their focus to key earnings to come from General Electric, McDonald's and others, after the rout in the previous session owing to threats of profit-hindering regulation for banks.

Futures for the Dow Jones Industrial Average were up 15 points to 10,354. Those for the S&P 500 were up 2.5 points to 1,113.60, and futures for the Nasdaq 100 rose 4.25 points to 1,845.25.

U.S. stocks suffered their worst one-day decline in nearly three months Thursday as bank shares tumbled under the threat of new regulations, and the basic-materials sector fell on global tightening worries. The Dow Jones Industrial Average plunged 213.27 points or 2%, in its second straight triple-digit point decline.

President Barack Obama proposed the most extensive curbs on market speculation by banks since the outbreak of the recent financial crisis, which came as markets fretted over prospects of China cooling its economy further. Asia stocks suffered sharp losses Friday, focused on commodity-linked shares and financials overnight, while Europe was also down with banks lower.

But analysts said U.S. markets could regroup a bit on Friday, with focus returning to earnings due from General Electric /quotes/comstock/13*!ge/quotes/nls/ge (GE 16.02, -0.48, -2.91%) , McDonald's /quotes/comstock/13*!mcd/quotes/nls/mcd (MCD 63.20, +0.19, +0.30%) and Kimberly-Clark /quotes/comstock/13*!kmb/quotes/nls/kmb (KMB 61.11, -0.98, -1.58%) among others before the opening bell. Expected strong results from GE will likely give the market a boost, said Christian Tegllund Blaabjerg, Copenhagen-based market strategist at Saxo Bank.

He said investors should remember Obama's bank proposals won't get anywhere if they aren't put into practice on a global scale, which may be impossible. "Short-term fluctuations will happen on the back of this, sure, but in the longer term, there is no way there will be a global agreement on how to implement these proposals," said Blaabjerg.

He also sees little impact on most bank earnings, outside of perhaps Goldman Sachs /quotes/comstock/13*!gs/quotes/nls/gs (GS 161.16, -6.92, -4.12%) , from the proposals. "When people starting to look at these proposals in more depth, I think they will realize this is not going to curb earnings for the big banks," he said.

Among shares on the move, Advanced Micro Devices /quotes/comstock/13*!amd/quotes/nls/amd (AMD 8.99, +0.12, +1.35%) slipped 5% in preopen trade. The company registered its first profitable quarter in three years, helped by a settlement with Intel /quotes/comstock/15*!intc/quotes/nls/intc (INTC 20.84, -0.24, -1.14%) late Thursday.

Google /quotes/comstock/15*!goog/quotes/nls/goog (GOOG 582.98, +2.57, +0.44%) was down over 3% in preopen. The company topped analysts' views with fourth-quarter sales gains late Thursday.

The economic calendar for the U.S. on Friday has no releases scheduled.

Gold futures were down $6.90 to $1,096.40 an ounce, while crude oil futures were up 26 cents to $76.33 a barrel.

The dollar slipped against the yen, owing to a fall in Asian equities that usually prompts investors to seek the perceived safer, lower-yielding yen that benefits whenever investors are averse to risk.

Barbara Kollmeyer is an editor for MarketWatch in Madrid.

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