Stock Futures Upbeat Despite CAT's Weak Guidance
NEW YORK ( TheStreet) -- Stock futures were signaling an upbeat start to the week Monday, taking a cue from overseas markets as investors digested a downbeat outlook from Caterpillar
Futures for the S&P 500 were rising 7 points, or 4.7 points above fair value, to 1,554.5. The index slid 2.11% over the past five trading sessions. Futures for the Nasdaq were gaining 14.5 points, or 9.29 points above fair value, to 2,782.75. Futures for the Dow Jones Industrial Average were adding 45 points, or 34.49 points above fair value, to 14,515.
Caterpillar was flat at $80.50 after the world's largest maker of construction and mining equipment lowered its full-year profit outlook per share to $7 on revenue of $57 billion to $61 billion, down from previously-expected earnings per share of $7 to $9 on revenue of $60 billion to $68 billion. Caterpillar expects that demand for its mining machines will fall "significantly" amid slow growth in the world economy.
"Even as you look at the premarket action, people have pretty much come to the realization that Caterpillar is cheap with its single-digit p/e and modest yield," Chris Bertelsen, chief investment officer of Global Financial Private Capital in Sarasota, Florida, said in a phone intrview. "It's probably cyclically close to a bottom and you're probably seeing the lowest level this quarter and next quarter that you're going see for a while."
Cyclical stocks such as Caterpillar will turn higher after this quarter of stabilization as China maintains a relatively impressive growth rate, Bertelsen said.
Halliburton was popping 4% to $38.70 after the oilfield services company posted adjusted earnings of 67 cents a share, beating expectations by 10 cents, as stronger international business helped offset softness in North America and the company said it's close to resolving lawsuits related to the 2010 Macondo oil disaster. Revenue also topped estimates at $7 billion, compared with the $6.88 billion analysts surveyed by Thomson Reuters were expecting.
Toy company Hasbro posted first-quarter earnings of 5 cents a share on revenue of $663.7 million, better than earnings expectations of 4 cents a share on revenue of $638.8 million, as sales strengthened in almost all of its product categories.
About one-fifth of the S&P 500 companies have reported first-quarter earnings, with earnings-per-share growth looking to edge past 2% toward 3% or more, according to Dan Greenhaus, chief global strategist at the broker-dealer BTIG LLC in New York.