BLBG: U.S. Index Futures Little Changed Before Fed; Chevron Advances
U.S. stock-index futures were little changed before the Federal Reserve releases the minutes of its March meeting and as Alcoa Inc. unofficially kicks off earnings season.
Chevron Corp. and Exxon Mobil Corp. led energy companies higher in premarket trading after Royal Dutch Shell Plc agreed to buy BG Group Plc for about $70 billion. Twitter Inc. gained 5.2 percent, after jumping 4 percent yesterday, on renewed takeover speculation. Alcoa gained 2 percent before reporting results, due after the close of trading.
E-mini contracts on the Standard & Poor’s 500 Index expiring in June added 0.1 percent to 2,069.5 at 7:30 a.m. in New York. Dow Jones Industrial Average futures advanced 14 points to 17,799.
“Earnings this evening will be closely examined for dollar-strength impact,” said Patrick Spencer, equities vice-chairman at Robert W. Baird & Co. in London. “The market will look for any indication of rate increase in the FOMC minutes. Earnings will be more important for the equity market than anything coming from FOMC today.”
Dollar Concern
Concern that tumbling oil prices and a surging dollar will hurt earnings has weighed on American equities. Profits for S&P 500 companies probably fell 5.8 percent in the first three months of the year, according to analysts’ estimates compiled by Bloomberg. Earnings are also projected to slump in the next two quarters.
The dollar’s strength has already emerged as a threat to quarterly earnings. Pentair Plc slumped 5.6 percent in early trading after saying the surge in the greenback hurt sales.
Investors are looking to minutes of the Federal Open Market Committee’s last meeting, due at 2 p.m. in Washington, to shed light on the timing and subsequent pace of interest-rate increases. While Chair Janet Yellen has laid the groundwork for an increase this year, Fed officials this week hinted at putting off raising rates for the next two meetings while keeping a “shallow” pace once tightening begins.
A flurry of corporate deals lifted the benchmark early yesterday before the index erased gains and ended up 0.2 percent lower. The benchmark hasn’t posted three consecutive days of gains since Feb. 17.
Among other stocks moving on corporate news, Apple Inc. fell after Societe Generale SA cut the stock’s rating. Rite Aid Corp. retreated 2.2 percent after forecasting full-year earnings that fell short of analysts’ projections.
AbbVie Inc., Merck & Co. Inc., Gilead Sciences Inc. and Biogen Inc. rose at least 1 percent, leading health-care stocks higher.
