Futures Rise; Wilmington Trust Plummets
Stock index futures pointed to a higher open for Wall Street Monday at the start of a key week for investors, with Tuesday’s mid-term election, Wednesday's Federal Reserve announcement after a meeting to decide on monetary policy and Friday’s October jobs report among the highlights.
Futures were little changed on news that personal spending rose 0.2 percent even though income fell 0.1 percent in September. Economists had expected income to have risen 0.3 percent in September after jumping 0.5 percent in August, Briefing.com said.
Another raft of earnings reports will also be a topic of discussion this week.
Before the opening bell, Baker-Hughes reported third-quarter earnings that were four times higher on strong growth from its North American business, and the acquisition of BJ Services. Shares of the oilfield-services company rose in pre-market trading.
Loews reported third-quarter profits fell to $36 million or 9 cents a share, from $468 million or $1.08 a share, taking a hit from losses due to asbestos risks at CNA Financial, its commercial insurance affiliate. share.
In other economic news, ISM manufacturing figures and construction spending will be released at 10 a.m. The manufacturing index for October is expected to have edged down to 53.6 from 54.4 in September. Any number above 50 indicates growth in the sector.
Construction spending is forecast to have dropped 0.5 percent in September, following a rise of 0.4 percent in August, Briefing.com said.
Wilmington Trust's shares plunged more than 40 percent after news the bank will be acquired by M&T Bank in an approximate $351 million stock deal. The price values the Delaware bank at 46 percent below Wilmington Trust's closing price on Friday.
Ambac could be headed toward bankruptcy after the bond insurer said it will file Chapter 11 if it can't find financing. The company missed an interest debt payment Monday, and its shares fell 44 percent in pre-market trading.
McKesson , a pharmaceutical distributor, plans to buy US Oncology, a privately-held cancer specialist, for about $2.16 billion.
Republicans are widely seen taking control of the House of Representatives after Tuesday’s election, while Democrats are expected to retain control of the Senate. The expectation of gridlock has so far been taken as a positive by investors.
The outcome of the Fed meeting has in some ways been much more debated and has created more anxiety for markets than the outcome of the mid-term election, as the promise of a new round of quantitative easing has driven down the dollar, pumping up stocks and commodities prices around the globe.
Economists expect the Fed to announce a new program of easing that would include the purchase of about $500 billion in Treasury securities.
European stocks were firmer in morning trading, with miners and chemical companies among the gainers after surprisingly strong Chinese manufacturing data.
The dollar weakened ahead of the Federal Reserve's likely monetary easing. The dollar index was last this low on Jan. 19.
On Tap Next Week:
MONDAY: ISM manufacturing index, construction spending; after-the-bell earnings from Anadarko Petroleum
TUESDAY: Election Day, auto sales, FOMC meeting begins; before-the-bell earnings from BP, Pfizer, Kellogg and MasterCard; after-the-bell earnings from Electronic Arts
WEDNESDAY: FOMC announcement; MBA mortgage applications, Challenger job-cut report, ADP employment report, Treasury refunding announcement, factory orders, ISM non-manufacturing index, oil inventories; before-the-bell earnings from Time Warner, Aetna, CVS; after-the-bell earnings from Chesapeake Energy, News Corp, Prudential Financial and Transocean
THURSDAY: Chain-store sales, BoE announcement, jobless claims, productivity and costs, ECB announcement; after-the-bell earnings from Kraft and Starbucks
FRIDAY: Pending home sales index, non-farm payrolls report, consumer credit; Kansas City Fed President Hoenig speaks; before-the-bell earnings from Toyota; after-the-bell earnings from Berkshire Hathaway
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