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US STOCKS-Futures dip as earnings pace picks up

Chuck Mikolajczak
Monday, 13 Jan 2014 | 8:20 AM ET

* Suntory Holdings to acquire Beam for $83.50 per share

* Lululemon, Sodastream, Express fall after outlooks

* Futures off: Dow 10 pts, S&P 3.9 pts, Nasdaq 4.5 pts

NEW YORK, Jan 13 (Reuters) - U.S. stock index futures declined on Monday, as investors braced for a quarterly earnings season that will begin to pick up steam this week.

Earnings are expected from 29 companies in the S&P 500 this week, including banks such as Morgan Stanley, Citigroup Inc, Goldman Sachs and JPMorgan Chase & Co.

Results are also due from companies including First Horizon National Corp, M&T Bank Corp, People's United Financial Inc and Charles Schwab Corp.

"The weak morning continues the recent choppy start to the new year, as the market is unable to gain firm footing," said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.

"A lack of a positive theme to drive equities is creating this stalling effect. However, earnings could be the variable to bring the market back on track."

According to Thomson Reuters data, fourth-quarter earnings are expected to grow 7.3 percent over the year-ago period. However, the 9.8 ratio of negative guidance to positive outlooks is currently the largest on record.

S&P 500 futures fell 3.9 points and were below 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 lost 10 points and Nasdaq 100 futures declines 4.5 points.

Equities have started 2014 on a lackluster note, dipping 0.3 percent through the first seven trading sessions as market participants try to gauge the pace of the winding down of market-friendly economic stimulus by the Federal Reserve.

Beam Inc jumped 25.1 percent to $83.70 in premarket trading after the company agreed to be acquired by Suntory Holdings Limited for $16 billion, including debt, making the Japanese company the world's third-largest maker of distilled drinks.

A string of companies tumbled after forecasting earnings.

Lululemon Athletica Inc tumbled 15.1 percent to $50.58 before the opening bell after the yogawear retailer cut its forecast for the fourth-quarter due to weak sales in January.

Sodastream International slumped 15.8 percent to $42 after the home beverage system maker after its 2013 outlook.

Apparel retailer Express Inc lost 5.4 percent to $18 before the opening bell after the company lowered its fourth-quarter outlook.

But Wendy's outlook was a bright spot, sending shares up 7.9 percent to $9.11 after the fast-food restaurant chain estimated adjusted quarterly earnings above analysts' expectations, as expenses fell due to franchising many company-owned outlets.

British engineering firm Amec said it had provisionally agreed to buy Foster Wheeler in a cash and share deal that values the Swiss-based engineer at 1.9 billion pounds ($3.13 billion).

Intercept Pharmaceuticals Inc tumbled 28.8 percent to $317.48 in premarket trading. The stock jumped over 500 percent last week after its liver disease drug met the main goal in a study.

European stocks edged up thanks to a rally in banking shares after regulators agreed to water down the way a new leverage ratio for lenders is compiled.

Asian shares were mostly firmer in the wake of surprisingly weak U.S. jobs numbers that added to the case for the Federal Reserve to keep rates low for longer.