Indications: U.S. stock index futures hold small gains

By William L. Watts , MarketWatch

LONDON (MarketWatch) â€" U.S. stock futures held small gains Monday as investors prepared for the kick-off of earnings season and cooling operations at Japan’s damaged nuclear-power complex resumed following an aftershock to last month’s earthquake.

Futures on the Standard & Poor’s 500 index /quotes/comstock/21m!f:sp\m11 (SPM11 1,326, +2.60, +0.20%)  rose 3.2 points to 1.327.00, while Nasdaq 100 futures /quotes/comstock/21m!f:nd\m11 (NDM11 2,326, +7.75, +0.33%)  gained 8 points to 2,326.00.

Dow Jones Industrial Average futures /quotes/comstock/21b!f:dj\m11 (DJM11 12,341, +15.00, +0.12%)  rose 28 points to 12,354.

Asia Today: Japan's suppliers struggle

Japanese suppliers impacted by last month's quake are struggling to hang onto their business amid shortages of key components and electricity. Companies that rely on that hard-hit supply network are also rethinking their exposure to Japan.

A key question for investors will be whether companies trim 2011 guidance as inflation puts a squeeze on margins, said Michael Hewson, market analyst at CMC Markets. Signs the interest-rate cycle is beginning to turn toward tightening may also leave investors wary of pressing gains at current levels, he said.

Expectations the U.S. Federal Reserve will end its second round of quantitative easing in June may continue to hang over the market, leaving investors to wonder “what happens when the sugar rush of that liquidity” is withdrawn, he said.

Alcoa earnings due

Earnings season kicks off after Monday’s closing bell with the release of Alcoa’s /quotes/comstock/13*!aa/quotes/nls/aa (AA 17.92, -0.20, -1.10%)  latest results, which are expected to show the benefit of a strong rise in the price of aluminum since last year. Analysts surveyed by FactSet Research expect the aluminum giant to report quarterly earnings of 27 cents a share on revenue of $6.14 billion. Read "Market to focus on earnings in coming week."

“Risk appetite as a driver might be tested more thoroughly this week. Indeed, the [first-quarter] U.S. earnings season kicks off and the three main U.S. indices are at or near highs,” wrote strategists at KBC Bank in a note.

“So, investors will have to make up their mind and decide whether the earnings and the economic outlook warrant another up-leg [for] equities or whether the steep rally that started at the end of August ... is over and correction time has arrived,” they said.

No major U.S. economic data are set for release Monday, while Federal Reserve Vice Chair Janet Yellen is scheduled to speak in New York.

In Japan, an earthquake on Monday briefly interrupted cooling operations around the damaged Fukushima Daiichi nuclear-power plant. The aftershock rattled northeastern Japan on the one-month anniversary of the devastating March 11 earthquake and tsunami. The quake had a preliminary magnitude of 7.1 but was later downgraded to 6.6.

The earthquake came after Japan widened the evacuation zone surrounding the damaged plant. Read "Japan hit by 6.6 quake; evacuation zone widened."

In corporate news, Minnesota-based American Medical Systems Holdings Inc. /quotes/comstock/15*!ammd/quotes/nls/ammd (AMMD 22.33, +0.15, +0.68%)  definitively agreed to be acquired by Pennsylvania-based Endo Pharmaceuticals Holdings Inc. /quotes/comstock/15*!endp/quotes/nls/endp (ENDP 40.85, -0.10, -0.24%)  for $30 a share. The deal is valued at $2.9 billion, including Endo’s assumption of $312 million of American Medical Systems’ debt.

Wal-Mart Stores Inc. /quotes/comstock/13*!wmt/quotes/nls/wmt (WMT 52.54, -0.46, -0.87%)  , the world’s largest retailer, on Monday said it would implement a range of new competitive measures, including a plan to work more closely with suppliers to lower costs and to check competitors’ pricing more often.

The board of NYSE Euronext /quotes/comstock/13*!nyx/quotes/nls/nyx (NYX 38.70, -0.82, -2.07%)  on Sunday rejected the unsolicited $11.3 billion takeover offer from Nasdaq OMX Group Inc. /quotes/comstock/15*!ndaq/quotes/nls/ndaq (NDAQ 28.45, -0.62, -2.13%)  and IntercontinentalExchange Inc. /quotes/comstock/13*!ice/quotes/nls/ice (ICE 120.55, -1.71, -1.40%)  .

The exchange affirmed its commitment to its planned merger with Deutsche Boerse AG /quotes/comstock/11i!dboey (DBOEY 7.85, +0.23, +3.02%)   /quotes/comstock/11e!fdb1 (DE:DB1 55.13, +0.66, +1.21%)  . Read about NYSE's rejection of the Nasdaq-ICE bid.

The Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 12,380, -29.44, -0.24%)  ended Friday with a loss of 29.44 points to 12,380.05, making for a flat performance on the week.

European markets extended losses after the Japanese earthquake.

British banks gained ground, however, after the nation’s Independent Commission on Banking called on banks to ring-fence consumer operations but stopped short of calling for the formal separation of retail- and investment-banking units. Read "U.K. bank stocks rise after reform proposals."

Most Asian equity markets declined, with Japanese stocks losing ground after data showed a sharper-than-expected fall in core machinery orders. Read "BHP boosts Sydney, but most Asian stocks fall."

Crude oil edged down after trading at levels last seen in 2008, with Nymex futures /quotes/comstock/21n!f:cl\k11 (CLK11 111.72, -1.07, -0.95%)  down $1.15 at $111.64 a barrel in electronic trade.

The euro /quotes/comstock/21o!x:seurusd (EURUSD 1.4426, -0.0029, -0.2006%)  was 0.1% lower versus the U.S. dollar at $1.4449, while the greenback declined 0.4% versus the Japanese yen /quotes/comstock/21o!x:susdjpy (USDYEN 84.6800, -0.1800, -0.2121%)  to trade at 84.69 yen.

/quotes/comstock/21m!f:sp\m11 SP500 IDX JUN1 (SPM11) $ 1,326 Change +2.60 +0.20%Volume 1,519 Real time quotes /quotes/comstock/21m!f:nd\m11 NASD 100 JUN1 (NDM11) $ 2,326 Change +7.75 +0.33%Volume 28.00 Real time quotes /quotes/comstock/21b!f:dj\m11 DJ IND AVG JUN1 (DJM11) $ 12,341 Change +15.00 +0.12%Volume 20.00 Real time quotes /quotes/comstock/13*!aa/quotes/nls/aa Alcoa Inc (AA) $ 17.92 Change -0.20 -1.10%Volume 29.38m Real time quotes /quotes/comstock/15*!ammd/quotes/nls/ammd American Medical Systems... (AMMD) $ 22.33 Change +0.15 +0.68%Volume 1.20m Real time quotes /quotes/comstock/15*!endp/quotes/nls/endp Endo Pharmaceuticals... (ENDP) $ 40.85 Change -0.10 -0.24%Volume 1.59m Real time quotes /quotes/comstock/13*!wmt/quotes/nls/wmt Wal-Mart Stores Inc (WMT) $ 52.54 Change -0.46 -0.87%Volume 9.73m Real time quotes /quotes/comstock/13*!nyx/quotes/nls/nyx NYSE Euronext Inc (NYX) $ 38.70 Change -0.82 -2.07%Volume 6.36m Real time quotes /quotes/comstock/15*!ndaq/quotes/nls/ndaq NASDAQ OMX Group Inc (NDAQ) $ 28.45 Change -0.62 -2.13%Volume 3.90m Real time quotes /quotes/comstock/13*!ice/quotes/nls/ice IntercontinentalExchange Inc (ICE) $ 120.55 Change -1.71 -1.40%Volume 539,044 Real time quotes /quotes/comstock/11i!dboey Deutsche Boerse AG (DBOEY) $ 7.85 Change +0.23 +3.02%Volume 19,815 Real time quotes /quotes/comstock/11e!fdb1 Deutsche Boerse AG (DB1) € 55.13 Change +0.66 +1.21%Volume 4,834 Real time quotes /quotes/comstock/10w!i:dji/delayed Dow Jones Industrial Average (DJIA) 12,380 Change -29.44 -0.24%Volume 122.82m Real time quotes /quotes/comstock/21n!f:cl\k11 LIGHT CRUDE MAY1 (CLK11) $ 111.72 Change -1.07 -0.95%Volume 53,319 Real time quotes /quotes/comstock/21o!x:seurusd Euro vs. US Dollar (EURUSD) 1.4426 Change -0.0029 -0.2006%Volume 0.0000 Real time quotes /quotes/comstock/21o!x:susdjpy US Dollar vs. Japanese Yen (USDYEN) 84.6800 Change -0.1800 -0.2121%Volume 0.0000 Real time quotes

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

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