Stock Futures Slide as Traders Eye Earnings
NEW YORK (TheStreet) -- Stock futures were pointing to a lower open on Wall Street Tuesday as investors awaited a slew of bank earnings later this week and digested a number of economic reports.
Meanwhile, President Barack Obama, Treasury Secretary Timothy Geithner, and Federal Reserve Chairman Ben Bernanke all emphasized the necessity of raising the debt ceiling soon.
Futures for the Dow Jones Industrial Average were off 36 points, or 45.32 points below fair value, at 13,397. Futures for the S&P 500 were down 5 points, or 6.08 points below fair value, at 1459. Futures for the Nasdaq were down 7 points, or 7.65 points below fair value, at 2721.
Major U.S. stock averages finished mixed Monday. Apple(AAPL) shares fell, and bank stocks declined ahead of earnings reports this week.
Ted Weisberg, president of Seaport Securities, said he thinks that the stock market is basically suggesting that the economy is doing "a little better than it might be." While the economic numbers this week are important, the focus, he stressed, remains on fourth-quarter earnings.
"The problem with the entire market and fourth-quarter earnings is that with the market trading at current levels, which for many of the popular averages are at or making new recovery highs, there leaves little room for disappointment," said Weisberg. "So when stocks get priced to perfection in a general sense, companies better get it right because if they don't, then the stocks at least in the near term are going to suffer. It doesn't mean that we're going to throw the baby out with the bath water, but what it does mean is that there is little room for error."
He said that a company right now needs to "get it right" in all three areas of the trifecta of bottom-line growth, top-line growth, and guidance for it to have, in his opinion, a positive reaction on the market. Anything less could be problematic, with major averages and the overall market trading where it is.
Stephen Guilfoyle, chief economist at sarge986.com, said that besides looking at the economic data and a number of speeches from Fed officials on Tuesday, traders are "loading up" for the Goldman Sachs(GS) and JPMorgan Chase(JPM) reports on Wednesday.