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Futures Higher Amid Earnings, M&A Activity

CNBC.com
Monday, 11 Apr 2011 | 9:24 AM ET

Stock index futures pointed to a slightly higher open on Wall Street ahead of earnings season, which kicks off after the bell when Alcoa releases results.

The market can also move forward now that a compromise budget agreement was reached on $38 billion in spending cuts late Friday. President Obama will deliver a long-term plan for deficit reduction on Wednesday, according to Reuters, as the White House and Congress prepare to concentrate on the 2012 fiscal year budget and on raising the $14.3 trillion limit on government borrowing authority.

Meanwhile, a 7.1-magnitude tremor triggered a tsunami warning, and forced the evacuation of workers from the crippled Fukushima nuclear plant on Monday, exactly a month after the quake and tsunami caused devastation in the country.

The epicenter of the quake was in Fukushima prefecture, and struck at a depth of 10 kilometers (six miles).

Quick Peak into Earnings
Jonathan Golub, UBS Investment Bank, shares his preview of earnings season. "I think it's going to be a pretty good earnings season."

Commodities continued to trade at high levels, and to climb further, amid concerns about inflation and global unrest. The price of gold slipped from its highs but remained above $1,469 an ounce, while silver continued to rise.

In company news Alcoa, the world's leading aluminium producer, will open earnings season after the closing bell Monday. The company is expected to report quarterly earnings of 27 cents per share on revenue of $6.07 billion, according to Thomson Reuters.

JPMorgan Chase , Bank of America and Google are also expected to report earnings later in the week.

Google, meanwhile, traded flat after Oppenheimer reduced its 2011 margin assumptions for the search engine giant. The brokerage said, however, that first quarter results could mark a bottom in the stock.

And JPMorgan shares also traded flat to lower after news it was accused of breaking its duty to clientsby not warning clients with $500 million in an investment vehicle despite red flags warning it could collapse.

A couple of M&A deals grabbed the market's attention Monday. Global Crossing skyrocketed after news that Level 3 will buy the communications company for $23.04 a share, in a tax-free, stock-for-stock deal.

And Endo Pharmaceuticals has reached a definitive agreement to buy American Medical Systems , which sent its stock soaring. Endo will buy AMS for $30 a share, or $2.9 billion in cash, including the assumption and repayment of $312 million in AMS debt, the Wall Street Journal reported.

Federal Reserve Vice Chairman Janet Yellen speaks at 12:15 p.m. ET.

In Europe, the FTSE opened flat after the publication of the Independent Commission on Banking's (ICB) interim report into the future of the banking sector in London. The ICB report recommended banks ring fence retails and investment operations stopping short of a fear recommendation that banks break up entirely their retail and investment arms.

On Tap Next Week:

MONDAY: Evans speaks, Yellen speaks; earnings from Alcoa and Chevron's interim results after the bell.
TUESDAY: International trade, import and export prices, 3-year Treasury note auction, Treasury budget, CFTC's Gensler testifies on derivatives regulation, Dudley speaks, Bank of NY Mellon shareholder meeting
WEDNESDAY: Weekly mortgage applications, retail sales, business inventories, oil inventories, 10-year Treasury note auction, Beige Book, United Technologies shareholder meeting; earnings from JPMorgan before-the-bell.
THURSDAY: Weekly jobless claims, PPI, 30-year Treasury bond auction, Kocherlakota speaks, Plosser speaks, Lacker speaks, Nestle shareholder meeting; earnings from Hasbro before-the-bell and Google after-the-bell.
FRIDAY: CPI, Empire state manufacturing survey, Treasury international capital, industrial production, consumer sentiment, credit card default rates reported; Evans speaks, Hoenig speaks, G24/International Monetary Affairs meeting; Earnings from Bank of America and Mattel before-the-bell.

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