By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- U.S. stock futures rose modestly on
Monday, after last week's big drop for stocks, which has
strategists on the alert over important technical levels.
Futures for the Dow Jones Industrial Average (DJZ4) rose 34
points to 16,471, while those for the S&P 500 index (SPZ4)
gained 5.6 points to 1,899.90. Futures for the Nasdaq-100 index
(NDZ4) rose 4.5 points to 3,857.50.
Futures traded choppy, pulling back from bigger losses in Asian
trading. Investors were expected to turn their attention to
earnings season, which gets under way in earnest on Tuesday, with
major banks such as J.P. Morgan Chase & Co.(JPM) and Citigroup
Inc. (C) among those due to report.
"This is not a reversal in markets, but a pullback to important
levels -- 2,900 on the Eurostoxx 50 and 1,900 on the S&P 500,"
said Christian Tegllund Blaabjerg, senior strategist at Danske Bank
Markets. He said the S&P 500 (SPX) will probably retest that
level either Monday or Tuesday.
The S&P 500 and the Nasdaq-100 (RIXF) last week suffered
their deepest weekly declines since May 2012, with major indexes
all nearing or undercutting key support levels.
Earnings boost to come? Blaabjerg expects the earnings season to
provide a boost for U.S. stocks. "In the U.S., EPS (earnings per
share) growth expectations are 5% year-over-year, which should
easily be beaten, providing equity markets with renewed hope after
disappointing macro numbers," he said.
Europe's own EPS growth expectations of 7% won't be beaten, he
said. Some worry that a strong U.S. dollar will pressure the
corporate reporting season in the U.S.
Government offices will be closed on Monday in observance of the
Columbus Day, with bond markets also closed. No data is on the
calendar. Federal Reserve Vice Chairman Stanley Fischer was among
several Fed officials who spoke over the weekend. He said Saturday
that an eventual rate rise from the central bank won't damage the
global economy. Also: Fed's Evans: Stronger dollar is a
headwind
Stocks to watch:
CSX Corp. (CSX) was up 9% in early premarket trading. Citing
sources, The Wall Street Journal reported that Canadian Pacific
Railway Ltd. (CP) approached CSX about a tie-up. CSX rebuffed the
overture, made in the past week, those sources said. It's unclear
if Canadian Pacific will pursue it.
Shares of Tekmira Pharmaceuticals Corp. (TKMR) , one of the
pharmaceutical companies whose drug TKM-Ebola has been used in the
fight against the deadly virus, was up 7% in early premarket
action. Hazmat-suit maker Lakeland Industries Inc. (LAKE) was up
20% after a 126% jump last week on fears related to the Ebola
virus. In addition, shares of face-mask maker Alpha Pro Tech (APT)
rallied 18%.
Shares of Dave & Buster's Entertainment Inc. (PLAY) could
see more gains Monday after a strong debut on Friday.
Compuware Corp. (CPWR) may attract attention on news it will
spin off all its interest in Covisint Corp. (COVS) to
shareholders.
U.S. infection-prevention company Steris (STE) said it's buying
U.K. rival Synergy Health for $1.9 billion in cash and stock.
See more potentially moving stocks in Movers and Shakers
Other markets: European stocks traded mostly flat, while Hong
Kong stocks ( closed higher after strong Chinese trade data. Asian
stocks finished mostly lower. Gains for gold (GCZ4) were pared as
stock futures inched up, while recent losses for crude oil (CLX4)
were extended.
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