MarketWatch.com - Pre-Market Indications

Tuesday, January 18, 2011

Indications: U.S. futures pare gains on Citigroup, Apple

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By Polya Lesova and Kate Gibson, MarketWatch

NEW YORK (MarketWatch) â€" U.S. stock futures relinquished the bulk of their early gains Tuesday, as sentiment was pressured by disappointing earnings from Citigroup Inc. and news that Apple Inc. Chief Executive Steve Jobs was taking a medical leave.

Scaling back from a rise of more than 30 points, futures on the Dow Jones Industrial Average /quotes/comstock/21b!f:dj\h11 (DJH11 11,740, +15.00, +0.13%)  were lately up 10 points to 11,735, while S&P 500 futures /quotes/comstock/21m!f:sp\h11 (SPH11 1,288, -1.50, -0.12%)  fell 1.4 points to 1,288. Nasdaq 100 futures /quotes/comstock/21m!f:nd\h11 (NDH11 2,302, -18.50, -0.80%)  dropped 16.75 points to 2,303.25.

U.S. markets were closed Monday in observance of the Martin Luther King Jr. Day holiday. Asian markets finished mostly higher overnight, and European stocks rose in intraday trading Tuesday.

Steve Jobs to take medical leave

Apple Chief Executive Officer Steve Jobs tells employees that he will be taking a medical leave of absence.

Banking giant Citigroup /quotes/comstock/13*!c/quotes/nls/c (C 5.13, +0.09, +1.79%) reported a fourth-quarter profit of $1.31 billion, or 4 cents a share. On average, analysts polled by FactSet Research expected earnings of 8 cents a share. Read more about Citi’s results.

Meanwhile, Delta Air Lines Inc. /quotes/comstock/13*!dal/quotes/nls/dal (DAL 12.75, 0.00, 0.00%) said it swung to a profit of 2 cents a share in the quarter ended Dec. 31 from a loss of 3 cents a share in the same period a year ago. Adjusted earnings were 19 cents a share in the latest period, while analysts polled by FactSet were looking for a profit of 25 cents a share, on average. Shares of Delta slipped 5.5% in thin premarket trade.

On the economic front, the Empire State Manufacturing index rose to 11.9 in January, missing economists’ forecast for a rise to 13. After the market opens, the NAHB Housing Market Index for January will be released.

Apple weighs on technology sector

Shares of Apple /quotes/comstock/15*!aapl/quotes/nls/aapl (AAPL 348.48, +2.80, +0.81%)  slumped 5% in premarket trading after Chief Executive Officer Steve Jobs announced Monday that he will take a medical leave of absence to focus on his health. He will retain his CEO post and remain involved in big decisions for the company.

After the closing bell, Apple is expected to report fiscal fourth-quarter earnings of $5.41 a share, up from $3.67 a share in the year-earlier period, according to analysts surveyed by FactSet Research.

Also in the technology sector, International Business Machines Corp. /quotes/comstock/13*!ibm/quotes/nls/ibm (IBM 150.00, +1.18, +0.79%)  is due to report its quarterly results later Tuesday.

U.S.-listed shares of GlaxoSmithKline PLC /quotes/comstock/13*!gsk/quotes/nls/gsk (GSK 39.18, +0.30, +0.77%)   /quotes/comstock/23s!a:gsk (UK:GSK 1,171, -34.50, -2.86%)  dropped nearly 3% in premarket trading after the pharmaceutical giant said late Monday that it will take a charge of about $3.5 billion in the fourth quarter to cover legal costs.

In deal news, Comerica Inc. /quotes/comstock/13*!cma/quotes/nls/cma (CMA 42.25, 0.00, 0.00%)  said it will buy all of the outstanding shares of Sterling Bancshares Inc. /quotes/comstock/15*!sbib/quotes/nls/sbib (SBIB 7.70, +0.22, +2.94%)  in a stock-for-stock transaction. The deal will accelerate Comerica’s growth in Texas and maintain Comerica’s capital strength, the firms said.

In the currency markets, the greenback fell against most of its major rivals, with the dollar index /quotes/comstock/11j!i:dxy0 (DXY 78.87, -0.47, -0.59%)  trading down 0.7% to 78.820.

The euro rallied 1.1% to $1.3404, buoyed by news that Russia may lift its ban on buying Spanish sovereign debt.

The British pound advanced 0.6% to $1.5998, rising after data showed that the U.K.’s consumer-price inflation rose at an annual rate of 3.7% in December, up from 3.3% in November. Read more about U.K. inflation.

Crude oil for February delivery slipped 31 cents to $91.23 a barrel. The International Energy Agency on Tuesday raised its forecast for global oil demand this year, citing strong consumption in emerging markets.

Gold futures rose $11.20 to $1,371.70 an ounce in electronic trading on Globex.

Polya Lesova is chief of MarketWatch’s London bureau. Kate Gibson is a reporter for MarketWatch, based in New York.

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