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Tuesday, April 27, 2010

Indications: U.S. futures drift ahead of Goldman testimony

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By Steve Goldstein, MarketWatch

LONDON (MarketWatch) -- U.S. stock futures continued their pre-Fed drift on Tuesday, with Goldman Sachs in the spotlight as the investment bank faces questioning from a U.S. Senate committee on the extent it benefited from the collapse of the housing market.

S&P 500 futures fell 3.5 points to 1,204.70 and Nasdaq 100 futures dropped 4.25 points to 2,043.00. Futures on the Dow Jones Industrial Average edged 9 points lower, outperforming the other indices after components DuPont and 3M hiked their earnings guidance.

Shareholders sue Goldman

A Goldman Sachs shareholder files a lawsuit Monday against the bank, accusing the firm of failing to disclose a SEC investigation. Plus, Senate Democrats agree to kill a provision from their derivatives bill that would have allowed Berkshire Hathaway to avoid a significant financial hit; and WSJ's Melinda Beck and Laura Landro preview their pieces on the sun and your health.

U.S. stocks meandered on Monday, with the Dow Jones Industrial Average edging up a point behind Caterpillar's improved 2010 outlook while the S&P 500 and Nasdaq Composite finished with moderate losses. Cyclical stocks advanced while defensive sectors declined, and financials were hit as banking reform concerns lingered. See related story on Caterpillar.

Reform plans may be impacted by the hearings in Washington D.C. on Tuesday featuring Goldman Sachs /quotes/comstock/13*!gs/quotes/nls/gs (GS 152.03, -5.37, -3.41%) CEO Lloyd Blankfein and a vice president, Fabrice Tourre, testifying just days after the Securities and Exchange Commission accused to the investment banking stalwart of securities fraud relating to the sale of collateralized debt obligations. See related story on Goldman. See feature on CDOs.

"The financial industry is more interested in seeing the new set of rules and regulations. They can move forward once they know what the game plan is," said Marc Pado, a strategist at Cantor Fitzgerald.

TODAY'S INTERNATIONAL MARKET STORIES

Global Dow

• MarketWatch Topics: Greece • Asia Markets | Europe Markets | LatAm Markets • Canadian Markets | Israel Stocks | London • U.S.: Market Snapshot | After Hours

Tools• Latin American/Canadian indexes • European indexes | Asian indexes

More on the Markets • Bond Report | Oil News | Earnings Watch • Currencies | U.S. Economic Calendar

Earnings • Deutsche Bank profit surges 49% • Lloyds returns to profit as bad-debt charges fall • Norsk Hydro swings to first-quarter profit • BP reports profit surge as it battles oil spill

/conga/story/misc/international.html 73051

Ahead of the Federal Reserve's interest rate decision due Wednesday, Fed Chairman Ben Bernanke will be testifying in front of the National Commission on Fiscal Responsibility.

There also will be releases on the S&P/Case-Shiller home price index for February, due at 9 a.m. Eastern, and the Conference Board's consumer confidence gauge for April, due at 10.

The U.S. Treasury will be selling $44 billion of two-year notes, while Greek bonds continued to trade at big spreads vs. German bonds of equivalent maturity.

Earnings season continued as 3M /quotes/comstock/13*!mmm/quotes/nls/mmm (MMM 87.44, +0.86, +0.99%) and DuPont /quotes/comstock/13*!dd/quotes/nls/dd (DD 40.95, +0.73, +1.82%) climbed in premarket trade after the industrial giants hiked their annual earnings guidance. Ford's /quotes/comstock/13*!f/quotes/nls/f (F 14.46, +0.25, +1.76%) return to profitability dragged the U.S. automaker lower by nearly 2% in early trade.

Boston Scientific /quotes/comstock/13*!bsx/quotes/nls/bsx (BSX 7.06, -0.15, -2.08%) fell over 5% as the medical device maker cut its 2010 earnings guidance, citing the impact of a halt in defibrillator sales in mid-March.

Overseas, the Shanghai Composite dropped 2.1% as investors feared possible tightening measures, while the Stoxx Europe 600 dropped 1.2% in late-morning trade, with metals and banking sector stocks leading the slide.

Oil futures fell by around 75 cents a barrel, and the euro /quotes/comstock/21o!x:seurusd (CUR_EURUSD 1.3293, -0.0099, -0.7392%) dropped vs. the U.S. dollar.

Steve Goldstein is MarketWatch's London bureau chief.


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