Stock Futures Climb After Selloff, JPMorgan Results
stock index futures advanced on Tuesday, a day after the S&P 500 suffered its biggest drop in two months, as investors digested earnings from JPMorgan and Wells Fargo and prepared for retail sales data.
The benchmark S&P index .
SPX fell 1.
3 percent on Monday, its worst decline November 7, as investors exercised caution amid mounting negative corporate outlooks.
Almost 10 out of every 11 earnings pre-announcements for the current earnings season from S&P 500 companies have lowered estimates, according to Thomson Reuters data, which would be the lowest on record if it continues.
"No one wanted to commit until we get the flow of earnings and today that is exactly what is going to start, so all eyes are on JPMorgan and Wells Fargo," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
JPMorgan Chase & Co (JPM.
N) edged up 0.
3 percent to $57.
87 in choppy premarket trading after posting quarterly earnings.
Wells Fargo fell 1.
2 percent to $45 after results.
As the Federal Reserve has embarked on the winding down of its stimulus, which was largely responsible for the 29.
6 percent climb in the S&P 500 last year, investors may be forced to become more selective when it comes to stock valuations.
The forward price-to-earnings ratio for the index is at its highest level in nearly seven years.
"The market needs to now perform, not on the flow of money entering the market from the bond buying program, but rather on fundamentals.
And certainly it's going to be more of individual companies as opposed to following the leader as we saw last year," Cardillo said.
Later in the week, Bank of America Corp (BAC.
N), Citigroup Inc (C.
N), Goldman Sachs (GS.
N) and Morgan Stanley (MS.
N) are among the financial companies scheduled to post results.
S&P 500 futures rose 3.
6 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.
Dow Jones industrial average futures gained 30 points and Nasdaq 100 futures added 7.
Stratasys Ltd (SSYS.
O) dropped 4.
6 percent to $124 before the opening bell after the 3D printer maker, estimated full-year adjusted profit way below Wall Street estimates, as it warned expenses would rise significantly in 2014.
Merger activity continues to be lively.
Google Inc (GOOG.
O) gained 1.
4 percent to $1,138.
26 in premarket trade after the world's largest online search engine announced late Monday a $3.
2 billion deal to buy smart thermostat and smoke alarm maker Nest Labs Inc.
Charter Communications Inc (CHTR.
O) on Monday formally offered to acquire larger rival Time Warner Cable (TWC.
N) for $37.
3 billion, sparking what is likely to be a contentious battle to control the No.
Time Warner gained 1.
5 percent to $134.
37 before the opening bell.
Microsoft Corp (MSFT.
O) shares fell 0.
8 percent to $34.
69 in premarket trade after Citigroup cut the stock to "neutral" from a "buy" rating.
European shares fell as investors turned cautious after a string of disappointing earnings and outlook statements on Wall Street.
EU Asian shares came under pressure, with Japanese stocks tumbling more than 3 percent as the yen hit a four-week high against the dollar after last week's surprisingly weak jobs report raised concerns about U.