Futures indicated a modest drop for stocks at the market open Monday after Caterpillar reported disappointing earnings and an even gloomier outlook, but losses were mitigated by a big pharma deal and efforts by companies to cut costs.
Pfizer has agreed to buy fellow drug maker Wyeth for about $68 billion.Pfizer will reportedly pay a little more than $50 a share for Weyth at a time when both companies are facing patent expirations for major drugs.
Pfizer shares lost about 4 percent before the bell while Wyeth gained nearly 5 percent.
But Caterpillar shares tumbled nearly 9 percent after the company after the company missed fourth-quarter estimates and said it was facing difficult times ahead, requiring a cut of 20,000 in its workforce.
Futures were mostly below fair-market value less than an hour before the market open, though off their earlier lows, and the S&P 500 actually was showing a modest gain.
Home Depot helped offset some of the losses after the home improvement retailer reported earnings that beat Wall Street estimates and said it would cut its corporate officer ranks by 10 percent. Shares were up 2.7 percent premarket.
McDonald's shares also were called lower as the fellow Dow component reported a drop in quarterly profit. The earnings per share of 87 cents were better than Wall Street estimates, but shares fell 2.6 percent premarket.
Stocks in Europe were higher across the board, with London's FTSE-100 climbing the most after bank Barclayssaid it would not seek more capital and that it is profitable.
Shares of Barclays , which have been hammered over the past nine trading sessions, soared more than 44 percent in morning trading.
Elsewhere, shares of Sprint Nextel edged lower after the telecom said it would cut up to 8,000 jobs, or 14 percent of its workforce, and will suspend 401(k) payments in an effort to cut costs.
Kimberly-Clark lost 3.4 percent after it reported lower profits which it attributed to slowing business for Huggies diapers and the various paper products the company makes.
Shares of Dutch financial group ING soared more than 27 percent after it said it was taking a $1.3 billion-loss, tap into a Dutch government loan guarantee employee, and cut 7,000 jobs. The move was seen as an effort towards addressing the risk that the company faces ahead.
There are no economic reports due before trading starts, but the latest figures on leading economic indicators and existing home sales are due shortly after the start of trading.