Futures higher ahead of key data, earnings
Investors await the Federal Reserve policy decision and more key quarterly results.
U.S. equity futures rose in early premarket trade ahead of key earnings and economic data. The Federal Open Market Committee will conclude its two-day meeting and announce its rate decision and policy statement later in the day. Also, the ISM manufacturing index and earnings from many key companies are due out Wednesday.
In other news, the Chinese manufacturing sector expanded slower than expected in April as the official manufacturing PMI slipped to 50.6 in April from 50.9 in March and missed forecasts of a reading of 51.0. However, the U.K. manufacturing sector contracted slower than expected in April, as its manufacturing PMI rose to 49.8 from 48.6 on expectations of a reading of 48.5.
Japanese labor cash earnings fell less than expected from a year ago, showing potential signs of life in the economy following the recent stimulus efforts. Cash earnings fell 0.6% in April from the same period a year ago, a slower decline than the 1.2% expected drop.
Japanese investors bought 1.55 billion euros of European Stability Mechanism (ESM) and European Financial Stability Facility (EFSF) debt in April, showing the beginning of the outflow of money. Outflows of domestic money are a good indicator that Japan's stimulus efforts to inflate itself out of recession through a weaker currency are working.
S&P 500 futures rose 1.6 points to 1,593.80.
The EUR/USD was higher at 1.3192.
Gold rose 0.14% to $1,469.40 per ounce.
Asian shares were once again quiet as Chinese shares remained closed for a week-long holiday and Korean and Hong Kong shares were closed for the May Day holiday. The Japanese Nikkei Index fell 0.44% following the weaker than expected Chinese manufacturing PMI. Australian shares also fell 0.48% overnight on China fears.
European markets were also mostly closed for the May Day holiday, with all major markets save for the U.K. closed. The FTSE 100 Index rose 0.44% following the better than expected manufacturing PMI in the U.K. Materials stocks, specifically gold miners and copper miners, were notably strong overnight.
Commodities were mostly lower overnight following the weaker than expected Chinese manufacturing PMI, however precious metals did rise in increased central bank easing hopes. WTI crude futures fell 0.79% to $92.72 per barrel and Brent crude futures fell 0.67% to $101.68 per barrel. Copper futures declined 1.11% to $315.20, Gold was higher, and silver futures rose 0.47% to $24.28 per ounce.
Currency markets were quiet overnight despite all of the economic data as many foreign markets were closed. The EUR/USD was higher at 1.3192 and the dollar rose against the yen to 97.60. Overall, the Dollar Index fell 0.18% on weakness against the pound, the euro, the Canadian dollar and the Swiss franc.
Earnings reported Tuesday
Key companies that reported earnings Tuesday include:
Cummins (CMI) reported first quarter earnings per share of $1.44 vs. $1.86 on revenue of $3.92 billion vs. $3.97 billion.
McGraw-Hill (MHP) reported first quarter earnings per share of $0.80 vs. $0.73 on revenue of $1.18 billion vs. $1.17 billion.
Marathon Petroleum Corp. (MPC) reported first quarter earnings per share of $2.17 vs. $2.16 on revenue of $23.3 billion vs. $19.8 billion.
Valero (VLO) reported first quarter earnings per share of $1.18 vs. $0.98 on revenue of $33.47 billion vs. $30.41 billion expected.
Vertex Pharmaceuticals (VRTX) reported first quarter earnings per share of $0.03 vs. an expected loss of $0.19 per share on revenue of $328.4 million vs. $308.02 million.
Stocks moving in the premarket included:
Knight Capital Group (KCG) shares fell 0.56% ahead of its earnings release.
Vertex Pharmaceuticals (VRTX) shares rose 0.36% premarket as the company unexpectedly reported a quarterly profit per share.
Apple (AAPL) shares rose 0.12% premarket after it sold $17 billion in bonds of multiple maturities with 10-year yields pricing at 2.415%.
Notable companies expected to report earnings Wednesday include:
CBS (CBS) is expected to report first quarter earnings per share of $0.68 vs. $0.54 a year ago.
Chesapeake Energy (CHK) is expected to report first quarter earnings per share of $0.25 vs. $0.18 a year ago.
CVS (CVS) is expected to report first quarter earnings per share of $0.79 vs. $0.65 a year ago.
Facebook (FB) is expected to report first quarter earnings per share of $0.13.
Humana (HUM)is expected to report first quarter earnings per share of $1.81 vs. $1.49 a year ago.
MasterCard (MA) is expected to report first quarter earnings per share of $6.17 vs. $5.36 a year ago.
Time Warner (TWX) is expected to report first quarter earnings per share of $0.74 vs. $0.67 a year ago.
Visa (V) is expected to report second quarter earnings per share of $1.81 vs. $1.60 a year ago.
On the economics calendar Wednesday, MBA purchase applications, the ADP employment report, and the U.S. manufacturing PMI kick off the data docket followed by the ISM manufacturing index and construction spending data. Later this afternoon, the FOMC rate decision and policy statement are set to be released. Overnight, Bank of Canada Governor Mark Carney is expected to speak, and Japanese monetary base data is due out. Also, the BoJ minutes, the HSBC China manufacturing PMI, and the Eurozonem anufacturing PMI are all due out ahead of the ECB rate decision.
More from Benzinga
This artificially inflated and hyped up market is insulated from even negative earnings reports and other bad economic news. It no longer matters when the market is doing when it is being controlled and manipulated. When it seems a company will miss their forecasts the analysts just lower the forecasts to give the illusion the company is doing better than they really are. We have an anemic job market and the majority of the jobs being added are low wage service type jobs that usually are part-time with no benefits. Higher wage jobs are continued to be outsourced so the net effect is we add low wage jobs at the expense of high wage jobs which takes disposable income out of the market. Look at this market rally with a bit of skepticism because it is not built on sound fundamentals so be wary.
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