Wall St set for lower open after Asia data; earnings eyed

Source : REUTERS
Last Updated: Mon, Jul 09, 2012 13:42 hrs
A Wall St. sign is seen outside of the New York Stock Exchange

Chuck Mikolajczak

New York: US stock index futures pointed to a modestly lower open on Monday after economic data in Asia pointed to a slowing of global economic growth as investors looked to the upcoming US earnings season for direction.

Japan's core machinery orders fell at a record pace of 14.8 percent in May, far worse than the 3.3 percent forecast, while inflation in China eased to a 29-month low of 2.2 percent in June.

The data comes on the heels of Friday's disappointing U.S. jobs report which showed non-farm payrolls grew by only 80,000 in June.

Alcoa Inc will kick off earnings season after the closing bell with the aluminum giant expected to post a 5-cent per share profit for the second quarter. Investors will closely monitor corporate earnings for signs the euro zone debt crisis has dented corporate profits, especially among multinational companies.

"Focusing on macro has been the trend and China reporting weaker than expected inflation data and a sluggish global outlook, all these things are out there and they are in play just like Friday's unemployment number," said Gordon Charlop, managing director at Rosenblatt Securities in New York.

"Ultimately the question is are companies making money - are lower gas prices translating into enough of a relief for consumers that they are spending money on other goods and services - so the next quarter will tell us exactly how sustainable this recovery is."

Adding to pressure, Spanish bond yields rose past the 7 percent level viewed as unsustainable ahead of a meeting by euro zone finance ministers later in the day.

S&P 500 futures fell 4.7 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 36 points, and Nasdaq 100 futures declined 0.5 point.

Celgene Corp is one of two companies discussing whether to bid for Human Genome Sciences Inc, which seeks an alternative to a hostile offer by British drugmaker GlaxoSmithKline Plc, a source familiar with the situation said. Human Genome shares edged up 0.2 percent to $13.65 in premarket.

Amerigroup Corp jumped 38 percent to $88.76 in premarket trade after the company agreed to be acquired by rival WellPoint Inc for about $4.46 billon. WellPoint shares advanced 5 percent to $62.89 while fellow health insurer Wellcare Health Plans Inc surged 14.4 percent to $60.41.

Boeing Co gained 1.4 percent to $74.70 in premarket after the Dow component said it finalized an airplane order with Air Lease Corp valued at $7.2 billion.

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