Futures Point Lower Amid Earnings Jitters
CNBC.com Senior Writer
Wall Street was looking at a slightly lower open Monday as traders took a leery view of the kickoff to earnings season.
Dow component Alcoa begins earnings, which will start with a trickle this week before revving into full gear in what investors expect to be a bleak reflection of the steepening economic troubles.
Alcoa will report after the market close, with analsts surveyed by Briefing.com expecting the alumunim giant to show a 10-cent loss. Shares fell 4.2 percent premarket as Deutsche Bank lowered its rating on Alcoa to sell from hold.
Futures were indicating a drop of less than 0.5 percent as the market looked to rebound from last week's tumble that came amid bleak employment numbers.
Investors also will be awaiting developments in the potential sale of Citigroup's Smith Barney investment brokerage unit to . CNBC reported over the weekend that an announcement is unlikely todayin a deal that could net Citi more than $2.5 billion for surrendering its majority share to Morgan .
Another fall in oil prices more than also looked to be a drag on the market.
US light, sweet crude slipped $2 in early trading to below $38 a barrel as signs continued to point to weak global demand. The move came even as Saudi Arabia announced over the weekend that it was cutting output levels below those endorsed by the Organization for Petroleum Exporting Countries.
Shares in major energy producers drifted lower in premarket trading, with ExxonMobil falling 0.7 percent.
Also in the energy trade, Ukraine removed conditions on Monday that threatened a gas deal to resume Russian supplies, opening the way for the rival former Soviet states to resolve a dispute that has plunged much of Europe into an energy crisis.
Harley-Davidson led the big early losers as Goldman Sachs added the motorcycle maker to its conviction sell list. Shares fell more than 11 percent premarket.
Conversely, Pfizer gained 1.2 percent after Goldman upgraded the pharmaceutical to neutral from sell as the company restructures its operations.
Economic stimulus issues will be in the news throughout the week.
Congressional Democrats could schedule a vote this week on an expected joint request from President Bush and President-elect Barack Obama to release the second $350 billion traunch of funds from the Troubled Asset Relief Program, the bailout money being used to help troubled US institutions.
Automakers also were making their case for sustainability going forward following last weekend's auto show in Detroit.
CEOs from Ford , General Motors and Chrysler were speaking to CNBC this morning after assuring consumers that they were developing products to lead them into an energy-conscious future.
In housing, Lennar shares gained more than 2 percent premarket as the company sought to stave off allegations of impropriety from a California pastor who spent time in prison for stock fraud.
Lennar said its CEO did not receive a mortgage from the company and it was not engaged in a Ponzi scheme with its joint ventures.
In the global markets, trading was lower, with Europe off about 0.5 percent and Asian shares dropping about 2 percent.
There were no significant economic reports on tap Monday, but the rest of the week features retail sales and inflation numbers. Deccember's retail numbers are due Tuesday, while producer price index figures are due Wednesday and consumer price index Thursday.