Futures Edge Higher as More Earnings Await
U.S. stock index futures crept higher ahead of the open Monday as investors waited for the next batch of quarterly earnings for signs on whether the recent stock rally can continue.
The Dow Jones Industrial Average has risen 11 of the past 12 sessions, and the Dow and the Nasdaq now have eight consecutive weekly gains. The Dow, the S&P 500, and the Nasdaq all registered new multi-year closing highs on Friday.
However, one market expert thinks the stock rally has lost momentum and investors should bail out now or face a summer of sharp declines.
"We're on borrowed time (for) people wanting it to run much further now and we're entering the irrational exuberance level," Robin Griffiths, technical strategist from Cazenove Capital, told CNBC.
European stocks managed gains, but concerns over Greece's financial situation were underlined by rising yields for its government bonds. Asian stocks ended higher on the back of the strong U.S. close.
Earnings season is still in full swing this week with 164 S&P 500 companies set to report their quarterly numbers.
Dow component Caterpillar reported earnings of 36 cents a share, slightly less than projected, but the company raised its full-year outlook to $2.50 to $3.25 a share. Shares rose nearly 3 percent in premarket trading.
Monday is relatively light otherwise for earnings, but Hertz will report and Texas Instruments will release their earnings later in the day. Humana reported earnings of $1.52 per share on revenues of $8.44 billion. Its shares rose more than 3 percent premarket.
Citigroup shares dipped 1 percent after the government said it is selling 1.5 billion shares of the 7.7 billion it owns in the bailed-out bank. The sale should net a tidy profit for the government, which took its stake in Citi at $3.25 a share.
On the merger and acquisition front, Hertz agreed to buy rival Dollar Thrifty for about $1.2 billion, in a major consolidation move for the rental car market.
Consolidation was also a key theme in the airline sector, with talks between UAL and Continental continuing about a possible merger. The deal may have hit a potential snag over the price of a proposed stock swap deal, according to published reports.
No major economic numbers are set for release Monday, although the rest of the week is quite busy. One notable public appearance on the day's calendar is a New York speech by European Central Bank President Jean-Claude Trichet. Investors will likely listen for details on the Greek debt crisis. The Greek finance minister said earlier that Greece does expect to receive financial aid in time to avert default.
A key vote on financial regulation reform will take place late Monday to determine if debate on that proposed bill can begin. The outcome is still in doubt, but the ranking member of the Senate Banking Committee, Sen. Richard Shelby, says the two sides are closer than they've ever been to agreement.
A survey from the National Association for Business Economics could provide some hopeful signs for Americans and for the financial markets. It says that more U.S. companies plan to hire new workers over the next six months. Now 37 percent say they plan to increase their work forces, compared with 29 percent in January.