Stock futures pause, with eyes on China, earnings

By @ibtimes on

U.S. stock index futures were little changed on Tuesday, with investor focused on corporate earnings and the effects an interest rate hike in China may have on demand growth.

* Merger activity, which drove the Dow and S&P to 2-1/2 year highs on Monday, continued Tuesday, with Kindred Healthcare Inc's planned acquisition of RehabCare Group Inc to create a big post-acute healthcare services company.

* China's central bank raised interest rates by 25 basis points, its second increase in just over a month in a new bid to tame inflation, while consumer prices in Brazil surged at their fastest pace in nearly six years in January.

* Accelerating inflation in emerging markets, coupled with recent upbeat economic data, could favor equities in the United States and other developed markets.

* S&P 500 futures dipped 0.3 point and were nearly flat in terms of 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 9 points, and Nasdaq 100 futures added 0.75 point.

* Corporate earnings could once again dictate near-term market direction, with Walt Disney Co and Sara Lee Corp set to release results.

* Exchange group NYSE Euronext reported a smaller-than-expected 21 percent fall in quarterly profit, reflecting weaker trading activity amid growing competition.

* Intel Corp resumed shipments of a flawed chipset for use with its new processors, responding to demands from personal computer makers that will use the chips selectively.

* Following Monday's gains, the S&P 500 faces resistance around 1,325 with near-term support at 1,300 and 1,295.

(Editing by Jeffrey Benkoe)

Join the Discussion