Stocks were set for a higher open on Tuesday, with the S&P 500 looking to snap a two-day drop, as investors focus on a slew of corporate results and a decline in borrowing costs for Spain.
A better-than-expected Spanish bill sale boosted confidence as yields on Spain's 10-year bond dipped below 6 percent before a longer-term debt auction later in the week. Spanish debt yields have jumped recently on concerns about the nation's fiscal stability in the latest flare-up of the euro-zone debt crisis.
European stocks gained after the auction and better-than-expected consumer sentiment data from Germany. The FTSEurofirst 300 index of leading pan-European shares gained 1.2 percent. <.EU>
This week, 86 S&P 500 companies are scheduled to report results. According to Thomson Reuters data, of the 34 companies in the S&P 500 that have reported results through Monday, 76 percent have reported earnings above analyst expectations.
Goldman Sachs Group Inc
Johnson & Johnson
Earnings are coming in well enough to support the market and stabilize any significant downdraft. Spain specifically with the 10-year yield topping 6 percent, that is a headline that really instills fear into the market. said Peter Kenny, managing director at Knight Capital In Jersey City, New Jersey.
And though the earnings environment will continue to get more challenging moving forward into this recovery, there is no question earnings have been supportive of the market.
S&P 500 futures rose 9.9 points and were above 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 gained 84 points, and Nasdaq 100 futures added 14.75 points.
Commerce Department data painted a mixed picture on housing as groundbreaking on homes fell unexpectedly in March, but permits for future construction rose to their highest level in 3 1/2 years.
International Business Machines Corp
A unit of Toshiba Corp <6502.T> is in talks to buy IBM Corp's point-of-sale terminal business, which includes cash registers, a source familiar with the deal said on Tuesday.
A Federal Reserve report showed industrial output was flat for a second straight month in March, held back by a drop in manufacturing, and capacity utilization, a measure of how fully firms are using their resources, fell to 78.6 percent from 78.7 percent in February.
(Editing by Padraic Cassidy)