- Pre-Market Indications

Wednesday, January 19, 2011

Indications: U.S. stock futures falter after Goldman, housing

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By William L. Watts, MarketWatch

NEW YORK (MarketWatch) â€" U.S. stock futures wobbled mostly lower on Wednesday after Goldman Sachs Group Inc. reported an earnings drop and housing data proved mixed, denting cheer over strong financial results from Apple Inc.

S&P 500 futures /quotes/comstock/21m!f:sp\h11 (SPH11 1,284, -11.20, -0.87%)  fell 2.9 points to 1,291.8, while futures on the Dow Jones Industrial Average /quotes/comstock/21b!f:dj\h11 (DJH11 11,790, -21.00, -0.18%)  shed 5 points to 11,806.

Nasdaq 100 futures /quotes/comstock/21m!f:nd\h11 (NDH11 2,314, -16.75, -0.72%)  were up 1.25 points at 2,332.

Not a word about Steve Jobs

Not a single analyst asked about CEO Steve Jobs' medical leave on Apple’s conference call late Tuesday, sticking instead to questions about the tech bellwether’s earnings and outlook.

Shares of Goldman Sachs /quotes/comstock/13*!gs/quotes/nls/gs (GS 170.04, -4.64, -2.66%)   were off 3.3% after the firm reported a drop of more than 50% in fourth-quarter net profit. See more on Street powerhouse Goldman Sachs’ lower quarterly profit and revenue.

Providing a further snapshot of the nation’s housing market, the Commerce Department reported construction of new homes fell 4.3% in December, while the number of building permits issued rose 16.7%.

Strategists said investors continue to show a hearty, underlying appetite for risk, which bodes well for equities.

“Overall, any weakness tends to be short-lived,” said David Jones, chief market strategist at IG Index, with investors gunning for the 12,000 level on the Dow iIndustrials.

Strategists at Lloyds TSB said in a note: “All in all, the ‘risk-on/reflation’ trade seems in rude health, across asset classes, and keeps defying our expectation for a correction in [the first quarter].”

After Tuesday’s closing bell, Apple /quotes/comstock/15*!aapl/quotes/nls/aapl (AAPL 343.92, +3.27, +0.96%)  said first-quarter net income jumped to $6 billion, or $6.43 a share, compared to net income of $3.38 billion, or $3.67 a share, for the same period during fiscal 2010. Revenue jumped more than 70% to $26.74 billion on strong holiday sales of the iPhone and iPad. Read about Apple's first-quarter earnings.

Apple shares fell by more than 2% in Tuesday’s regular session, a day after the company announced that Chief Executive Steve Jobs would be going on another medical leave.

Apple shares rose 2% in U.S. premarket trade on Wednesday, while International Business Machines Corp. /quotes/comstock/13*!ibm/quotes/nls/ibm (IBM 154.95, +4.30, +2.85%)  gained 2.6%.

Late Tuesday, the tech bellwether and Dow component said fourth-quarter net income nearly doubled to $143.7 million, or 62 cents a share. Revenue rose 50% to $383.6 million. Read about IBM’s results.

Bank of New York Mellon Corp. /quotes/comstock/13*!bk/quotes/nls/bk (BK 31.97, -0.05, -0.16%)  said Wednesday that fourth-quarter profit from continuing operations fell 3.1% to $690 million, or 55 cents a share, including restructuring charges of 4 cents. Analysts surveyed by Factset Research had produced a consensus forecast of 57 cents a share.


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The Wall Street Journal reported that CEO Vikram Pandit plans to name John Havens as president and chief operating officer of Citigroup Inc. /quotes/comstock/13*!c/quotes/nls/c (C 4.80, 0.00, 0.00%) , as part of a structural overhaul. Havens has led the bank’s institutional clients group for the past three years.

European stocks were mostly lower in late morning trade, with losses for ASML Holding NV /quotes/comstock/15*!asml/quotes/nls/asml (ASML 37.40, -2.70, -6.73%)  weighing on the technology sector in the wake of the firm’s results. Read Europe Markets.

Most Asian markets advanced Wednesday, cheered by results overnight from Apple and IBM, while a weaker dollar lifted commodity-sector shares. Read Asia Markets.

U.S. stocks ended higher on Tuesday as upbeat manufacturing data boosted the energy and materials sectors, more than offsetting a subpar earnings report from Citigroup and worries about the health of Apple’s Jobs.

The Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 11,837, -1.32, -0.01%)  rose 50.55 points to close at 11,837.03, while the S&P 500 /quotes/comstock/21z!i1:in\x (SPX 1,287, -8.44, -0.65%)  ended with a gain of 1.78 points at 1,295.02.

The Nasdaq 100 /quotes/comstock/10y!i:comp (COMP 2,740, -25.82, -0.93%)  finished with a 0.2% gain at 2,328.79.

The Dow last week posted its seventh consecutive weekly gain, with Tuesday’s advance taking the blue-chip benchmark to its highest level since mid-2008.

In currencies, the U.S. dollar was weaker versus most major rivals, slipping against the Japanese yen /quotes/comstock/21o!x:susdjpy (USDYEN 82.0100, -0.5800, -0.7023%)  to trade at ¥82.06 as the euro /quotes/comstock/21o!x:seurusd (EURUSD 1.3493, +0.0106, +0.7918%)  rose to $1.3511.

And in commodities, gold futures rose $4.30 to fetch $1,372.5 an ounce, with Nymex crude-oil futures gaining 66 cents to stand at $92.04 a barrel in electronic trade.

William L. Watts is a reporter for MarketWatch in London.

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