Futures flat on global weakness

Alcoa kicked off earnings season with better-than-expected results.

By Benzinga Jan 9, 2013 9:27AM
zurbar age fotostocksU.S. equity futures were essentially unchanged overnight as fears over the health of the European economy and of growing credit risks in China spooked investors. Markets also await the interest rate decisions from the Bank of England and the European Central Bank Thursday.

In other news, Italy's deficit narrowed to 1.8% in the third quarter from 2.5% in the same period in 2011, showing that outgoing Prime Minister Mario Monti's policies have been working.

(AA) kicked off fourth quarter earnings season by beating estimates. The company reported quarterly earnings per share of $0.21 vs. a loss of $0.18 per share a year ago.

Germany sold five-year notes to yield 0.53%, rising from the previous 0.41%, with the bid-to-cover ratio dropping to 1.8 from 1.9.
  • S&P 500 futures rose 0.5 points to 1,452.80.
  • The EUR/USD was lower at 1.3068.
  • Spanish 10-year government bond yields rose to 5.113%.
  • Italian 10-year government bond yields rose to 4.314%.
  • Gold rose 0.08% to $1,663.70 per ounce.
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Asian markets
Asian shares were mostly higher overnight following the positive earnings release from Alcoa. The Japanese Nikkei Index rose 0.67% and the Shanghai Composite Index fell 0.03% and the Hang Seng Index rose 0.46% in Hong Kong. Also, the Korean Kospi fell 0.31% while Australian shares rose 0.38%.

European markets
European shares were mostly higher in early trade led by Italian shares following the positive budget data. The Spanish Ibex Index rose rose 0.61% and the Italian MIB Index rose 1.09% in early trade. Meanwhile, the German DAX gained 0.07% and the French CAC rose 0.11% while U.K. shares rose 0.29%.

Commodities were mixed overnight with energy futures declining on reports that U.S. output of oil will grow faster than expected over the next few years. WTI crude futures fell 0.18% to $92.98 per barrel and Brent crude futures fell 0.11% to $111.80 per barrel. Copper futures rose 0.41% as Chinese and Australian shares gained despite new fears over a growing credit bubble in China. Gold was higher and silver futures rose 0.03% to $30.48 per ounce.

Currency markets were seemingly reversing moves from Tuesday overnight as the euro slipped and the yen weakened. The EUR/USD was slightly lower at 1.3068 and the dollar rose against the yen to 87.50. Overall, the Dollar Index rose 0.11% on strength against the yen, the euro, the Swiss franc and the Swedish krone. The AUD/USD was relatively flat overnight and the biggest mover was the AUD/JPY cross, moving 0.53% higher as traders piled into the carry-trade in hopes of unlocking yield differentials between the two countries.

Premarket movers
Stocks moving in the premarket included:
  • Clearwire Corporation (CLWR) shares rose 8.56% pre-market after Dish Network (DISH) offered to buy the company at a higher price than Sprint (S). Sprint shares traded 3.69% lower premarket on the news.
  • Alcoa (AA) shares rose 2.75% premarket following the company' earnings beat Tuesday after the close.
  • Microsoft (MSFT) shares rose 0.38% premarket as Google (GOOG) withdrew a patent suit against the company. (Microsoft owns and publishes Top Stocks, an MSN Money site.)
  • Bank of America (BAC) shares fell 1.19% premarket as investors still digest the mortgage settlement announced earlier this week.
Notable companies expected to report earnings Wednesday include:
  • Constellation Brands (STZ) is expected to report third quarter EPS of $0.55 vs. $0.50 a year ago.
  • Ruby Tuesday (RT) is expected to report a second quarter loss of $0.06 per shares vs. a loss of $0.03 per share a year ago.
On the economics calendar Wednesday, MBA Purchase Applications are set to be released and the Treasury is set to auction benchmark 10-year bonds. Overnight, the Chinese trade balance is set to be released and Italy and Spain are both set to auction bonds. These releases come ahead of the Bank of England and European Central Bank interest rate decisions.

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Jan 9, 2013 11:22AM
We have to worry about the World, they might STOP BORROWING us money...  Then what?
Jan 9, 2013 10:16AM

I thought the numbers, were more then "good" from AA and it is up 2-3% pre-Market...


And Futures are flat.....WTF.??

Let's quit worrying about the World and concentrate on us.....The U.S.

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