RTRS: Stock futures rise as corporate results in view
By Leah Schnurr
NEW YORK (Reuters) - Stock index futures pointed to a higher open on Thursday as investors scrutinize fresh corporate results and economic data to get a clearer picture of the depth and breadth of the year-long recession.
Shares of Ingersoll-Rand Co Ltd (IR.N: Quote, Profile, Research, Stock Buzz) were down 1.2 percent at $16.16 in premarket trade after it lowered its fourth-quarter and full-year 2008 revenue and earnings estimates.
In the auto sector, General Motors (GM.N: Quote, Profile, Research, Stock Buzz) and Chrysler LLC have reopened merger talks, the Wall Street Journal reported, citing people familiar with the discussions.
As well as a fresh round of corporate results from sectors including technology, investors will get a look at the state of the U.S. labor market with initial jobless claims due at 8:30 a.m. (8:30 a.m. EST).
"On the earnings front, we seem to have a market that has assumed the worst-case scenario has been priced in," said Arthur Hogan, chief market analyst, Jefferies & Co in Boston.
"On the economic data front, that seems to be having a much more intuitive effect on the marketplace, meaning negative news pushes the market in a negative direction, so we'll have to see how things unfold today."
S&P 500 futures rose 3.50 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 climbed 51 points, and Nasdaq 100 futures added 1.75 points.
The Journal report said Chrysler owner Cerberus Capital Management LP CBS.UL has signaled its willingness to cede part of its ownership in the automaker. GM and Chrysler have been lobbying Washington for a financial lifeline to help them weather slowing demand and tight consumer credit.
Companies expected to report quarterly results include world No. 3 software maker Oracle (ORCL.O: Quote, Profile, Research, Stock Buzz), FedEx (FDX.N: Quote, Profile, Research, Stock Buzz) and Carnival Corp (CCL.N: Quote, Profile, Research, Stock Buzz).
After the closing bell on Wednesday, video game publisher Take-Two Interactive Software (TTWO.O: Quote, Profile, Research, Stock Buzz) reported a quarterly loss and issued a 2009 forecast that fell short of expectations.
In the financial sector, Dick Bove, a widely followed bank analyst with Ladenburg Thalmann, widened his fourth-quarter loss estimate for Citigroup (C.N: Quote, Profile, Research, Stock Buzz), saying the bank may take significant writedowns in its capital markets operations, similar to those seen from Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz) and Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) this week.
On Wednesday, Bove raised his price target and profit view on Morgan Stanley, helping the stock reverse a loss and end higher.
The latest data showed more signs of recession around the world as German corporate sentiment deteriorated sharply in December, while British mortgage lending tumbled 51 percent year-on-year.
On Tuesday, the Federal Reserve -- the U.S. central bank -- cut its benchmark interest rate target to near zero and pledged further action to stave off the year-long recession.
On Wednesday, stocks fell as the government's effort to pull the U.S. economy out of a deep recession raised worries about mounting public debt and blunted optimism following the Fed's move.
