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Futures Still Point Higher After Retail Sales News

U.S. stock index futures continued to point to a slightly higher open Monday after news of a better-than-expected jump in retail sales in October, and despite a drop in an indicator of manufacturing in New York.

Futures had been pointing higher earlier despite concerns over the debt situation in periphery euro zone countries, after news of acquisitions by Caterpillar and EMC.

Stocks closed lower Friday and lower for the week on the back of the debt concerns and expectations of monetary tightening in China.

October's retail sales rose 1.2 percentin October, their biggest gain in seven months, up from a 0.7 percent gain in September. Excluding autos, retail sales rose 0.4 percent, versus 0.5 percent in September.

The November Empire Manufacturing Index fell to -11.1 in November from 15.7 in October, far more than expected. Economists surveyed by Reuters expected the index to fall to 14.

Caterpillar said it will buy Bucyrus in an $8.6 billion dealthat will help the Dow component expand its reach in the mining equipment industry. Caterpillar shares fell 1.4 percent in pre-market trading, while Bucyrus soared 30 percent.

And EMC said it will pay $2.25 billion to acquiredata company Isilon in the biggest deal in the industry since Hewlett-Packard acquired 3Par earlier this year. EMC shares edged higher while Isilon rose 29 percent.

In company news, BHP Billiton said it was dropping its $39 billion bid for fertilizer company Potash, and instead will restart its buyback program and return $4.2 billion to shareholders. BHP shares gained nearly 1 percent in pre-market trading, while Potash slipped 1.5 percent.

Massey Energy shares were higher on speculation in the Wall Street Journal that Arcelor Mittal is also interesed in acquiring the coal mining company.

Goldman Sachs will not be able to repay $5 billion to investor Warren Buffett yet as the Federal Reserve hammers out guidelines for dividend increases, according to a report in the Wall Street Journal.

Over the weekend, former Federal Reserve Chairman Alan Greenspan said the U.S. must reduce its debt mountain or risk a bond market crisis.

European shares were mostly lower Monday with miners leading the declines. Ireland did not rule out the need to tap the European Union for emergency funds, but officials said again that no request had been made. Asian stocks were mixed with Japanese and Chinese markets gaining.

The euro was lower against the dollar because of the concerns. The dollar index rose to a six-week high as U.S. Treasury yields also gained.

Lowe's posted disappointing resultsMonday morning, and U.S. sales suffered a slowdown. Sales rose 1.9 percent to $11.59 billion, shy of the $11.75 billion anticipated by analysts surveyed by Thomson Reuters I/B/E/S. The home improvement retailer also cut its forecast.

Nordstrom and Urban Outfitters will release results after the close.

In other news, California is set to begin a bond auction and is looking to raise some $14 billion in debt.

On Tap Next Week:

MONDAY: Business inventories, credit card default rates reported, 13-F filings due, Motorola analyst meeting; Earnings from Lowe's and Nordstrom
TUESDAY: PPI, Treasury international capital, industrial production, housing market index, Microsoft shareholders meeting, Atlanta Fed Pres Lockhart speaks; Earnings from Home Depot, Wal-Mart and TJX
WEDNESDAY: Weekly mortgage applications, CPI, housing starts, oil inventories, St. Louis Fed Pres Bullard speaks, GM IPO pricing, LA auto show kicks off, Qualcomm analyst meeting; Earnings from Target and Applied Materials
THURSDAY: Weekly jobless claims, leading indicators, Philadelphia Fed survey, Cisco shareholder meeting; Earnings from Dell and Gap
FRIDAY: Bernanke speaks at ECB Central Banking Conference, Harry Potter movie premieres

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