Stock index futures pointed to a lower open on Monday as investors paused after a five-week rally to prepare for key company earnings later in the week, and some bank stocks reversed part of their sharp gains from last week.
Key banks, which kicked off a rally in early March when several institutions said they were profitable in the first two months of the year, will report quarterly earnings this week, giving investors a fresh insight into the health of the sector.
Banks rallied on Friday after Well Fargo & Co
Also hitting sentiment, The U.S. Treasury Department is directing General Motors
Adding to concern over earnings season Boeing Co
Earnings season started last week but we really don't get into the hot and heavy and heavy until this week, said Craig Peckham, equity trading strategist at Jefferies & Company in New York, adding that bank earnings will be a key indicator for the market.
Certainty the outcome is more important here, he said regarding GM, adding that an orderly bankruptcy is preferable to a slow and painful death.
S&P 500 futures fell 5.1 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 50 points, and Nasdaq 100 futures slipped 4.75 points.
The S&P 500 closed out a five-week rally on Friday which boosted the broad-based stocks gauge 26.6 percent from closing lows on March 9. However, the index is still down 5.2 percent on the year.
Some financial stocks retreated in pre-market trade, with JPMorgan down 1.4 percent to $32.29 and Goldman Sachs off 1.3 percent to $122.54.
Wells Fargo & Co
Boeing fell 5.1 percent to $37.14 in premarket trade. Barclays cut its price target on the stock to $50 from $66 on Monday morning.
In merger news Express Scripts Inc
(Reporting by Edward Krudy; Editing by Theodore d'Afflisio)