MarketWatch.com - Pre-Market Indications

Wednesday, February 9, 2011

Indications: Futures point to a pause for Wall Street

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By Barbara Kollmeyer, MarketWatch

MADRID (MarketWatch) â€" U.S. stock futures pointed to a lower open Wednesday after a string of Wall Street gains, as investors await comments from Federal Reserve Chairman Ben Bernanke.

Futures for the Dow Jones Industrial Average /quotes/comstock/21b!f:dj\h11 (DJH11 12,185, -11.00, -0.09%)  dropped 15 points to 12,181, while those for the S&P 500 index /quotes/comstock/21m!f:sp\h11 (SPH11 1,318, -4.10, -0.31%)   fell 3.6 points to 1,318.10.

Nasdaq 100 futures /quotes/comstock/21m!f:nd\h11 (NDH11 2,357, -5.75, -0.24%)   slipped 5.75 points to 2,357.

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On Tuesday, the Dow /quotes/comstock/10w!i:dji/delayed (DJIA 12,233, +71.52, +0.59%)  marked its seventh winning session, closing up 71.52 points at 12,233, the highest close since June 16, 2008.

Multiyear closing highs were also seen for the S&P 500 /quotes/comstock/21z!i1:in\x (SPX 1,325, +5.52, +0.42%)   and the Nasdaq /quotes/comstock/10y!i:comp (COMP 2,797, +13.06, +0.47%) .

“Having reached highs not seen for 2 ½ years, a correction is always likely to occur, and with not much in the way of economic data to get their teeth into, investors may well see today as a selling opportunity,” said Ben Critchley, sales trader at IG Index.

“Despite this, the [fourth-quarter] reporting season continues apace, and solid quarterlies from the likes of Coca-Cola, MetLife /quotes/comstock/13*!met/quotes/nls/met (MET 48.47, -0.16, -0.33%)   and Prudential /quotes/comstock/13*!pru/quotes/nls/pru (PRU 64.01, -0.01, -0.02%)  could provide the juice needed to extend the rally through to the end of the week,” he said in emailed comments.

With no economic data on the calendar, comments from Bernanke are expected to get close attention. He is due to testify on the economic outlook and monetary and fiscal policy at the House Budget Committee at 10 a.m. Eastern.

As for earnings, plenty of companies were due to report before the opening bell, including Northrop Grumman Corp. /quotes/comstock/13*!noc/quotes/nls/noc (NOC 71.09, +0.74, +1.05%)  and Polo Ralph Lauren /quotes/comstock/13*!rl/quotes/nls/rl (RL 115.77, +1.93, +1.70%) .

Coca-Cola Co. /quotes/comstock/13*!ko/quotes/nls/ko (KO 62.87, +0.35, +0.56%)   reported that its fourth-quarter profit rose to $5.77 billion, or $2.46 a share, from $1.54 billion, or 66 cents a share, in the year-ago period. On an adjusted basis, the latest quarterly earnings came in at 72 cents a share, in line with the analyst consensus estimate provided by FactSet Research.

Shares of Take-Two Interactive Software Inc. /quotes/comstock/15*!ttwo/quotes/nls/ttwo (TTWO 14.54, +0.19, +1.29%)  jumped 8% in premarket trade after the videogame maker’s quarterly results soundly beat Wall Street expectations. Read about Take-Two’s results.

Euro hit by Weber talk

The euro was hit by talk that inflation hawk Axel Weber won't take the top job at the European Central Bank after all, trimming rate-hike expectations. But it's a confusing situation, and the significance is open to question.

Also in the premarket, shares of St. Joe Company /quotes/comstock/13*!joe/quotes/nls/joe (JOE 29.05, -0.30, -1.02%)  added 9% after the firm said late Tuesday that it is considering a sale of the company, among other options.

Shares of Walt Disney Co. /quotes/comstock/13*!dis/quotes/nls/dis (DIS 41.18, +0.24, +0.59%)  rose almost 5% in preopen trade after the company reported late Tuesday that stronger advertising revenue for television and buoyant home-video sales of “Toy Story 3” boosted its first-quarter profit. Read about Disney’s results.

Shares of American International Group Inc. /quotes/comstock/13*!aig/quotes/nls/aig (AIG 42.37, +0.19, +0.45%)  could be in focus after the insurer said it will take a $4 billion charge to boost reserves. To help fund this, it has gotten U.S. Treasury clearance to retain $2 billion of the net cash proceeds from its recent sale of AIG Star Life Insurance.

Ingersoll-Rand /quotes/comstock/13*!ir/quotes/nls/ir (IR 49.03, +0.45, +0.93%)  reported a fourth-quarter profit of 62 cents a share and said it sees a 2011 profit of $2.90 to $3.10 a share. Analysts were forecasting a quarterly profit of 64 cents a share.

Sanofi-Aventis SA /quotes/comstock/13*!sny/quotes/nls/sny (SNY 34.98, +0.38, +1.10%)  reported a sharp drop in fourth-quarter earnings. No mention was made of the company’s progress in acquiring Genzyme Corp. /quotes/comstock/15*!genz/quotes/nls/genz (GENZ 73.92, -0.10, -0.14%) . 

RealNetworks Inc. /quotes/comstock/15*!rnwk/quotes/nls/rnwk (RNWK 3.96, +0.06, +1.54%)  said late Tuesday that it is cutting 130 jobs, or about 10% of its work force, and is taking a $3 million charge in the first quarter as a result. The firm added it would save $11 million annually.

In Europe, major stock markets were weaker, led by miners, though utilities marched higher. Read more about Europe stocks.

Shares of the London Stock Exchange Group PLC /quotes/comstock/23s!e:lse (UK:LSE 979.00, +87.00, +9.75%)  jumped 9% after the firm announced a $6.9 billion all-stock merger with Canada’s TMX Group Inc. /quotes/comstock/11t!e:x (CA:X 40.28, 0.00, 0.00%)  that will create the world’s No. 2 operator in terms of listed companies. See LSE to merge with Canada’s TMX.

China and Hong Kong led Asian markets lower as investors there got their first chance to react to China’s rate hike, which was announced late Tuesday for those markets. Stocks fell on worries that Beijing could tighten policy further in coming months.

Gold futures for April delivery were steady at $1,363.90 an ounce, while crude-oil futures for March delivery rose 44 cents to $87.38 a barrel.

The dollar rose 0.4% against the Japanese yen to ¥82.58, and the euro was steady against the dollar.

Reuters reported Wednesday that Axel Weber, the former chief of the Bundesbank, will not be a candidate to take over as president of the European Central Bank when Jean-Claude Trichet’s term is up in October. He had been viewed as a front-runner for the post. Read more about Weber.

Barbara Kollmeyer is an editor for MarketWatch in Madrid.

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