Stock Futures Squeeze Out Advances as Fed Begins Meeting
NEW YORK ( TheStreet) -- U.S. stock futures were eking out gains Tuesday as Merck
Futures for the S&P 500 were up 4 points, or 6.42 points above fair value, to 1,686.5 while futures for the Dow Jones Industrial Average were up 25 points, or 50.03 points above fair value, to 15,508. Futures for the Nasdaq were rising 10.25 points, or 13.55 points above fair value, to 3,075.75.
"We ... believe the taper bias will continue to be softened in light of data suggesting economic growth is slowing as well as the tightening in financial conditions that has occurred since the June FOMC meeting," Laura Rosner, a New York-based U.S. economist at BNP Paribas, said in a report.
The Fed begins its meeting Tuesday. Wednesday will also bring second-quarter U.S. gross domestic product figures. The week will conclude with the release the U.S. government's July non-farm payrolls report on Friday.
A number of U.S. economic reports were scheduled for Tuesday. The S&P/Case-Shiller 20-city home price index showed a lower-than-expected year-over-year gain of 12.2% in May following a 12.1% increase in April. Expectations were for a gain of 12.4% in May, according to a Thomson Reuters poll of economists.
Set for 10 a.m. release, the Conference Board's Consumer Confidence Index is forecast to come in at 81.4 for July, unchanged from June.
On the earnings front, Merck was slipping 0.4% to $48.14 after reporting second-quarter net income that shrank to $906 million from $1.793 billion a year ago as the drug maker continues to navigate significant patent expirations, seeing sales of its allergy medication Singulair drop by 80%. Earnings per share on an adjusted squeezed past estimates by a penny at 84 cents a share.
Coach was tumbling 5.9% to $54.36 after the luxury goods company posted in-line quarterly earnings of 89 cents a share as sales in its North America market softened and Coach announced that North American Group president Mike Tucci and chief operating officer Jerry Stritzke have resigned and will depart at the end of August.
Fertilizer companies came under deep pressure Tuesday on expectations that potash prices could drop by as much as 25% to roughly $300 a ton by year end after Russian potash giant Uralkali pulled out of a marketing venture with Belarus, breaking up one of the world's largest of such partnerships that controlled nearly half of the global potash market. Potash Corp.
Twenty five companies were scheduled to release second-quarter earnings before Tuesday's opening bell.
So far, 274 companies have reported earnings results for the second quarter. Of those, 180 have topped analysts' estimates -- 68 have missed and 26 have met, producing a beat rate of 66%, which is above the historical average, according to Christine Short, an associate director for global markets intelligence at S&P Capital IQ.