Futures Higher But MasterCard Limits Gains
Futures indicated a slightly higher open for U.S. stocks Friday as investors shrugged off Chrysler's bankruptcy announcementand decided to go against the "sell in May and go away" mantra after April's successful performance.
Premarket trading volume was lethargic as major continental European markets closed for the May Day holiday, while the UK, which will shut for a bank holiday on Monday, was barely lower.
Gains are likely to be limited by some earnings reports that disappointed Wall Street.
MasterCard shares fell more than 6 percent after the company beat analyst estimates but showed an overall lower use of credit cards by consumers.
Also, Hartford Investment Group shares tumbled more than 12 percent after the company reported a first-quarter loss of $1.21 billion or $3.77 a share, worse than expectations of $3.05 a share.
The fourth biggest U.S. insurer said it was closing most of its operations in Britain, Ireland and Germany as part of a pullback from Europe.
On the plus side, shares of DryShips surged more than 11 percent after the company posted earnings of 36 cents a share, nearly double the 19 cents that Wall Street expected.
Encouraging U.S. jobless claims figures on Thursday added to a sense of optimism that the U.S. economy is recovering.
In corporate news, Citadel Investment Group is reportedly expanding into investment banking and has hired three ex-Merrill Lynch executives to head up the new operation, according to a Reuters source late Thursday.
It became official on Friday that Sumitomo Mitsui Financial Group (SMFG) will buy Citigroup's Japanese brokerage and investment banking units for $5.9 billion.
Citi shares rose about 4 percent in premarket trading.
Also in the banking sector, regulators could announce the stress test results of the 19 individual banks next week (possibly May 6) instead of just summary results, a source told Reuters.
In energy, BP shares gained 2.4 percent premarket as the sector adjusts to lower oil prices. Earlier this week the company reported a 62 percent drop in first-quarter net profit due to the collapse of prices, thoughcost reductions helped it beat analyst estimates.
On the economic front, the Institute of Supply Management's report on manufacturing is due at 10 am New York time and is expected to mark an improvement after an economic report showed that business activity in the U.S. Midwest contracted at a much less severe rate in April, according to Reuters.
Also at 10 am New York time, factory orders for March are due. At 9:55 am the final April consumer confidence index is due.
And Treasury Secretary Timothy Geithner will speak at 8 am, while Federal Reserve Bank of Illinois President and CEO Dr. James B. Bullard will speak at 8:45 am.
Big earning results out on Friday include Chevron and MasterCard before the opening bell. The oil major is expected to report earnings per share of 81 cents, while the credit card company is forecast to post a profit of $2.61 per share for the first quarter, analysts polled by Thomson Reuters predicted.
Meanwhile, Mexico began shutting down its businesses in an effort to slow the spread of a new swine flu strain as more cases were found in the United States and officials urged increased worldwide precautions against a possible pandemic.
The World Health Organization Friday said the number of officially confirmed cases of the new flu was 331 in 11 countries, including 10 deaths.