MarketWatch.com - Pre-Market Indications

Monday, April 11, 2011

Indications: U.S. stock-index futures cling to small gains

Stock Assault 2.0 - Artificial Intelligence Stock Market Software

By William L. Watts and Kate Gibson , MarketWatch

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

Futures on the Standard & Poor’s 500 index /quotes/comstock/21m!f:sp\m11 (SPM11 1,327, +3.60, +0.27%)  rose 2.1 points to 1.325.9, while Nasdaq 100 futures /quotes/comstock/21m!f:nd\m11 (NDM11 2,317, -1.00, -0.04%)  gained 7.25 points to 2,325.25.

Dow Jones Industrial Average futures /quotes/comstock/21b!f:dj\m11 (DJM11 12,380, +54.00, +0.44%)  added 18 points to 12,344. On Friday, the Dow /quotes/comstock/10w!i:dji/delayed (DJIA 12,418, +38.94, +0.31%)  ended with a loss of 29.44 points to 12,380.05, making for a flat performance on the week.

Japan's suppliers struggle

Japanese suppliers impacted by last month's quake are struggling to hang on to their business amid shortages of key components and electricity. .

A key question for investors will be whether companies trim their 2011 forecasts as inflation squeezes margins, said Michael Hewson, market analyst at CMC Markets.

Signs that the interest-rate cycle is beginning to turn toward tightening may also leave investors wary of pressing gains at current levels, he said.

Expectations for the U.S. Federal Reserve to conclude 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continue to hang over the market, leaving investors to wonder “what happens when the sugar rush of that liquidity” is withdrawn, he said.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 Inc.’s /quotes/comstock/13*!aa/quotes/nls/aa (AA 18.02, +0.10, +0.56%)  latest results, which are expected to have benefited from a strong rise in aluminum prices. On average, analysts surveyed by FactSet Research expect Alcoa to report a quarterly profit of 27 cents a share on revenue of $6.14 billion. Read more about upcoming earnings season.

“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 corporate news, Minnesota-based American Medical Systems Holdings Inc. /quotes/comstock/15*!ammd/quotes/nls/ammd (AMMD 29.46, +7.13, +31.93%)  said it will be acquired by Pennsylvania-based Endo Pharmaceuticals Holdings Inc. /quotes/comstock/15*!endp/quotes/nls/endp (ENDP 42.75, +1.90, +4.65%)  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 52.87, +0.33, +0.62%) , the world’s largest retailer, said Monday that it would implement a range of new competitive measures, including a plan to work more closely with suppliers to cut costs and to check competitors’ pricing more often.

The board of NYSE Euronext Inc. /quotes/comstock/13*!nyx/quotes/nls/nyx (NYX 37.90, -0.80, -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 28.13, -0.33, -1.14%)  and IntercontinentalExchange Inc. /quotes/comstock/13*!ice/quotes/nls/ice (ICE 121.22, +0.67, +0.56%) .

NYSE affirmed its commitment to its planned merger with Deutsche Boerse AG /quotes/comstock/11i!dboey (DBOEY 7.90, +0.05, +0.64%)   /quotes/comstock/11e!fdb1 (DE:DB1 55.00, +0.53, +0.97%) . Read about NYSE's rejection of the Nasdaq-ICE bid.

International markets

In Japan, an earthquake 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 quake came after Japan widened the evacuation zone surrounding the damaged plant. Read more about latest Japan quake.

European markets extended losses after Japan’s 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 more about proposed U.K. bank reforms.

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 lower, with Nymex futures /quotes/comstock/21n!f:cl\k11 (CLK11 111.48, -1.31, -1.16%)  down $1.1 to $111.69 a barrel in electronic trade.

The euro /quotes/comstock/21o!x:seurusd (EURUSD 1.4451, -0.0004, -0.0277%)  was lower versus the U.S. dollar at $1.4423, while the greenback was off versus the Japanese yen /quotes/comstock/21o!x:susdjpy (USDYEN 84.5700, -0.2900, -0.3417%)  to trade at 84.64 yen.

/quotes/comstock/21m!f:sp\m11 SP500 IDX JUN1 (SPM11) $ 1,327 Change +3.60 +0.27%Volume 1,555 Real time quotes /quotes/comstock/21m!f:nd\m11 NASD 100 JUN1 (NDM11) $ 2,317 Change -1.00 -0.04%Volume 31.00 Real time quotes /quotes/comstock/21b!f:dj\m11 DJ IND AVG JUN1 (DJM11) $ 12,380 Change +54.00 +0.44%Volume 20.00 Real time quotes /quotes/comstock/10w!i:dji/delayed Dow Jones Industrial Average (DJIA) 12,418 Change +38.94 +0.31%Volume 40.69m Real time quotes /quotes/comstock/13*!aa/quotes/nls/aa Alcoa Inc (AA) $ 18.02 Change +0.10 +0.56%Volume 14.84m Real time quotes /quotes/comstock/15*!ammd/quotes/nls/ammd American Medical Systems... (AMMD) $ 29.46 Change +7.13 +31.93%Volume 33.43m Real time quotes /quotes/comstock/15*!endp/quotes/nls/endp Endo Pharmaceuticals... (ENDP) $ 42.75 Change +1.90 +4.65%Volume 3.80m Real time quotes /quotes/comstock/13*!wmt/quotes/nls/wmt Wal-Mart Stores Inc (WMT) $ 52.87 Change +0.33 +0.62%Volume 3.29m Real time quotes /quotes/comstock/13*!nyx/quotes/nls/nyx NYSE Euronext Inc (NYX) $ 37.90 Change -0.80 -2.07%Volume 3.01m Real time quotes /quotes/comstock/15*!ndaq/quotes/nls/ndaq NASDAQ OMX Group Inc (NDAQ) $ 28.13 Change -0.33 -1.14%Volume 976,366 Real time quotes /quotes/comstock/13*!ice/quotes/nls/ice IntercontinentalExchange Inc (ICE) $ 121.22 Change +0.67 +0.56%Volume 194,892 Real time quotes /quotes/comstock/11i!dboey Deutsche Boerse AG (DBOEY) $ 7.90 Change +0.05 +0.64%Volume 8,127 Real time quotes /quotes/comstock/11e!fdb1 Deutsche Boerse AG (DB1) € 55.00 Change +0.53 +0.97%Volume 5,014 Real time quotes /quotes/comstock/21n!f:cl\k11 LIGHT CRUDE MAY1 (CLK11) $ 111.48 Change -1.31 -1.16%Volume 155,081 Real time quotes /quotes/comstock/21o!x:seurusd Euro vs. US Dollar (EURUSD) 1.4451 Change -0.0004 -0.0277%Volume 0.0000 Real time quotes /quotes/comstock/21o!x:susdjpy US Dollar vs. Japanese Yen (USDYEN) 84.5700 Change -0.2900 -0.3417%Volume 0.0000 Real time quotes

William L. Watts is a reporter for MarketWatch in London. Kate Gibson is a reporter for MarketWatch, based in New York.

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