U.S. stock futures are down slightly in the pre-market this morning. Japanese and European stocks drift lower on concerns for earnings growth. Gold and oil prices are flat despite a slightly strengthening U.S. dollar.
Market Review
In overseas equity markets this morning, major Asian markets ended mixed. Japan's Nikkei 225 index fell 0.8 percent today, led by Mitsubishi UFJ Financial Group, Japan's largest bank, slipping 2.4 percent.
China's Shanghai Shenzen index edged up by 0.2 percent. Hong Kong's Hang Seng jumped 1 percent.
European equity markets took a hit this morning on disappointing earnings results by companies. The German DAX index is down 0.9 percent. Europe's biggest automaker, Volkswagen AG shares fell 2.2 percent.
The French CAC Alstom SA, the world's second-largest train maker, dropped 4.6 percent and Casino Guichard-Perrachon SA slipped 1.5 percent.
Britain's Footsie 100 index is lower by 0.8 percent. U.K. bank HSBC Holdings Plc, slid 2.2 percent.
U.S. stock futures edged down by about 0.2 percent on Tuesday's pre-market. U.S. stocks finished lower last week, with the S&P 500 declining 0.8 percent.
Oil futures are roughly even coming off a low trading volume holiday weekend, with the February contract at just under $78 a barrel this morning.
The price of gold is flat, trading at $1,129 per ounce on a slightly stronger U.S. dollar, up 0.5 percent.
Economic Preview
On the economic front, December housing starts will be released on Wednesday. Economists are expecting housing starts to edge up to an annualized rate of 579,000 for December compared to 574,000 in November.
Also on Wednesday, the producer price index or PPI will be reported for December. The PPI jumped 1.8 percent in November after gaining just 0.3 percent in October. Economists are expecting PPI to be flat for December.
On Thursday, jobless claims are expected to drop to 440,000 for the week ending January 16, down from 444,000 for the previous week.
Kraft Buys Cadbury
Kraft Foods (KFT) improved its cash-and-stock offer for U.K. chocolate producer Cadbury (CBY) to $19.7 billion, winning the support of Cadbury after more than four months of rebuffs and courting by other confectioner companies including Nestle (NSRGY) and Hershey (HSY). Kraft shares were down 2.4 percent, while Cadbury’s U.S.-listed shares were up 5.1 percent in pre-market trading.
Earnings Preview
This week will be busy on the earnings front with 61 members of the S&P 500 index reporting.
Citigroup (C) posted a fourth quarter loss of $7.6 billion or 33 cents a share and meeting consensus estimates. Citi is the second major financial institution after J.P. Morgan Chase (JPM) to release results for this earnings season. Citi shares are down 3.1 percent in pre-market action.
International Business Machines (IBM) will report fourth quarter earnings after the market closes today. Hardware sales are expected to be positive for the company. Consensus estimates call for profits of $3.47 per share. During the latest quarter, IBM raised its full-year earnings forecast to at least $9.85 a share, from $9.70 a share. Shares of IBM are up 57 percent over the past 12 months.
On Wednesday, Bank of America (BAC) is scheduled to report results before the market opens. Analysts are calling for earnings of minus 52 cents per share.
Also at the market close on Wednesday, eBay (EBAY) will release results. Current consensus earnings estimates are for 40 cents per share compared with 41 cents in the year earlier fourth quarter.
Google (GOOG) will report earnings after the market closes on Thursday. Analysts expect profits of $6.43 a share and $4.88 billion in net revenue for the fourth quarter, compared to profits of $5.10 a share and $4.22 billion for the same quarter last year. Top line strength is forecast for Google's online advertising revenue segment.
On Friday, McDonald’s (MCD) is scheduled to report fourth quarter results before the market opens. The consensus earnings estimate is $1.02 per share. McDonald's got a lift in the pre-market after Credit Suisse raised the company to outperform from neutral and lifting its price target to $71 from $69 a share.
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