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Monday, October 4, 2010

Indications: U.S. stock futures weaken on investor caution

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By Barbara Kollmeyer and Kate Gibson, MarketWatch

NEW YORK (MarketWatch) â€" U.S. stock index futures pointed to an early retreat for Wall Street on Monday, with investors cautious ahead of possible earnings warnings and monthly jobs data late in the week.

“This week should struggle with a short-term overbought condition, a general lack of major economic news, and another all-important Friday release on jobs, and lull before the earnings storm that might see some earnings warnings,” Marc Pado, U.S. market strategist at Canter Fitzgerald, wrote in a note.

Futures for the Dow Jones Industrial Average /quotes/comstock/21b!f:dj\z10 (DJZ10 10,730, -38.00, -0.35%)  fell 20 points to 10,748, while those for the Nasdaq 100 /quotes/comstock/21m!f:nd\z10 (NDZ10 1,988, -6.75, -0.34%)  fell 5.25 points to 1,989.25 and those for the S&P 500 /quotes/comstock/21m!f:sp\z10 (SPZ10 1,138, -4.00, -0.35%)  fell 2.7 points to 1,139.6.

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On Friday, U.S. stocks kicked off the month of October with small gains, but finished lower on the week, taking in a wave of mixed economic reports. The Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 10,830, +41.63, +0.39%) rose 41.63 points, or 0.4%, to 10,829.68, down 0.3% on the week. The Nasdaq Composite Index /quotes/comstock/10y!i:comp (COMP 2,371, +2.13, +0.09%)  rose less than 0.1% to 2,370.75 and the S&P 500 /quotes/comstock/21z!i1:in\x (SPX 1,146, +5.04, +0.44%)  rose 0.4% to 1,146.24.

Deal news was grabbing the immediate attention of investors on Monday. Topping the list, French drug maker Sanofi-Aventis /quotes/comstock/13*!sny/quotes/nls/sny (SNY 33.12, -0.13, -0.39%)  announced a hostile, $18.5 billion bid for U.S. biotech group Genzyme Corp. /quotes/comstock/15*!genz/quotes/nls/genz (GENZ 70.88, +0.09, +0.13%) .

Sanofi approached Genzyme during the summer, but its offer was rejected, and in a statement on Monday said its conversations with shareholders reveal they are “frustrated” with the U.S. group.

Deal news sent shares of same-day delivery and logistics provider Dynamex Inc. /quotes/comstock/15*!ddmx/quotes/nls/ddmx (DDMX 15.31, +0.06, +0.39%)   soaring 35% in pre open trade. Dynamex agreed to be bought by Greenbriar Equity Group for $21.25 a share, or $210 million.

Shares of Actel Corp. /quotes/comstock/15*!actl/quotes/nls/actl (ACTL 16.02, +0.07, +0.44%)   jumped 28% in pre open trade after the producer of field programmable gate arrays agreed to be bought by chipmaker Microsemi Corp. /quotes/comstock/15*!mscc/quotes/nls/mscc (MSCC 17.11, -0.01, -0.07%)  for $20.88 a share.

Shares of Swiss banks UBS AG /quotes/comstock/13*!ubs/quotes/nls/ubs (UBS 17.12, +0.09, +0.53%)  and Credit Suisse Group AG /quotes/comstock/13*!cs/quotes/nls/cs (CS 43.24, +0.68, +1.60%)  could be in focus after a banking panel in Switzerland recommended tougher new requirements on capital.

Third-quarter earnings season kicks off in earnest on Thursday with Alcoa Inc. /quotes/comstock/13*!aa/quotes/nls/aa (AA 12.23, +0.12, +0.99%)  due to report after the market close.

On the U.S. economic calendar, August pending-home sales and factory orders are due at 10 a.m. Eastern time. But the big report for markets comes later this week, with the monthly nonfarm payrolls report due Friday.

In Europe, oil and bank auto sectors were lower, while in Asia key benchmarks pushed to 2-year highs helped in part by yen weakness. Europe Markets

The price of crude oil fell 13 cents to $81.46 a barrel, while gold futures fell 30 cents to $1.317.5 an ounce.

The euro fell against the dollar to $1.3707.

Barbara Kollmeyer is an editor for MarketWatch in Madrid. Kate Gibson is a reporter for MarketWatch, based in New York.

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