MW: Stock futures higher ahead of home prices, ISM
By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) — U.S. stock index futures indicated Wall Street was set to bounce back Tuesday from the worst day of the year for the Dow industrials. Investors will zero in on data on house prices and a reading on the health of the nonmanufacturing sector.
Doubling earlier gains, futures for the Dow Jones Industrial Average DJH3 +0.54% rose 70 points, or 0.5%, to 13,915, while those for the Standard & Poor’s 500 index SPH3 +0.50% rose 7.6 points to 1,501.
Futures for the Nasdaq 100 index NDH3 +0.48% rose 11.75 points, or 0.4%, to 2,723.25.
At 8:30 a.m. U.S. Eastern time, CoreLogic — one of the timeliest providers of home-price data — will release its report for December. While it’s widely known that U.S. house prices rebounded strongly in 2012, the CoreLogic data could show just how strong that was and whether the trend extended into December.
At 10 a.m. Eastern, the Institute for Supply Management’s index of conditions in the nonmanufacturing sector will be released. A MarketWatch poll shows that the index likely slipped to 55% from 55.7% in December. Any number above 50% signals expansion.
The Tell: What to watch on the U.S. economy on Tuesday
“The ISM nonmanufacturing composite reading is the likely highlight here, and although continued expansion is likely to be posted, there may be some slowing in the rate. However it would likely take a sharp reversion here to have any meaningful impact on the wider index,” said Fawad Razaqzada, market strategist at GFT Markets.
NDH3 +0.48% U.S. stocks suffered their worst day of the year on Monday after political worries sent Italian and Spanish debt yields rising, rattling investors around the globe.
The Dow industrials DJIA -0.93% finished down 129.71 points, or 0.9%, to 13,880.08. It had closed above 14,000 on Friday for the first time since October 2007. Read: Stocks' worst day of the year sends Dow below 14,000
“Italian elections are just a matter of weeks away, and as always with markets at what some could determine as inflated levels, the potential for profit-taking simply cannot be underestimated,” Razaqzada said in a note.
“January was without doubt a bumper month for equity markets, but it’s becoming increasingly difficult to believe this pattern will be repeated throughout the year,” he said.
European stocks largely traded higher on Tuesday, recouping from sharp losses seen the previous day, with investors focused on earnings from a raft of heavyweights. ARM Holdings PLC. ARMH -1.29% UK:ARM +3.81% shares rose 6% after the company said the new year was off to a good start with a record backlog. Read: Europe stocks recovery, ARM Holdings rallies .
Data out of Europe showed private-sector activity across the euro zone continued to shrink in January, but the decline was the smallest in 10 months. Euro-zone PMI signals downtown eased in January .
Asia stocks mostly fell as Europe’s political troubles made their way back into the investor spotlight. Read: Asia stocks fall as Europe tensions rise .
Oil prices rose, along with gold, while the dollar trimmed gains as the euro consolidated a day after euro-zone jitters prompted some profit-taking.
Movers
On the corporate front for Tuesday, Yum Brands Inc. YUM -3.02% shares were down more than 6% in premarket action. The Taco Bell parent late on Monday reported fourth-quarter adjusted earnings of 83 cents a share, against the FactSet-derived analyst estimate of 82 cents. The company estimated that in 2013, earnings per share would drop in the mid-single-digits percent. Read: Yum Brands profit falls 5% as China sales jump
Boeing Co. BA +0.45% will be on radar screens. The Wall Street Journal reported late Monday that U.S. regulators are leaning toward allowing the Chicago aerospace major to conduct test flights of its 787 Dreamliner jet. Technical problems have grounded the plane in recent weeks. Read: Boeing may get go-ahead for 787 test flights: WSJ .
