Published November 05, 2012
NEW YORK – Stocks were set to open little changed in low volume on Monday as cautious traders awaited Tuesday's presidential election to place bets on which sectors are expected to perform better depending on which political party wins.
President Barack Obama and Republican challenger Mitt Romney sprinted through key states on the last day of campaigning for the White House, with investors eyeing some congressional races. Investors are nervous about the "fiscal cliff" and how the United States will deal with the $600 billion in spending cuts and tax hikes that could kick in next year and send the economy reeling.
"People are pausing ahead of the election and what that means for the fiscal cliff," said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis.
The Institute for Supply Management will release its October nonmanufacturing index at 10 a.m. (1500 GMT). Economists forecast a reading of 54.5 versus 55.1 in September.
Paulsen said the ISM number could give the market direction, but also warned economic data could soon begin to be affected by last week's superstorm Sandy that devastated parts of the Eastern Seaboard.
"Every major number is going to be distorted because the storm hit such a large area," he said.
A week after Sandy wreaked havoc on New York City and the surrounding area, close to 2 million people still have no power as cold weather sets in. On Sunday 30,000 to 40,000 people in New York City were in need of shelter.
S&P 500 futures edged up 0.8 point and were slightly below 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 rose 14 points, and Nasdaq 100 futures rose 7 points.
Transocean Ltd reported a higher-than-expected adjusted profit for the third quarter and its shares were up 3.7 percent at $47.74 in premarket trading.
Leading world economies pressed the United States on Sunday to act decisively to avert a rush of spending cuts and tax hikes, warning that the so-called fiscal cliff is the biggest short-term threat to global growth.
European stocks fell 0.6 percent as investors opted for safe havens ahead of the U.S. vote.
A private survey of China's growing services sector slipped in October, with weaker-than-expected new orders injecting a note of caution after three previous PMI surveys for October showed the world's second-largest economy regaining momentum.
Greece's government will present a new austerity package to parliament on Monday, facing a week of strikes and protests over proposals which must win deputies' approval if the country is to secure more aid and stave off bankruptcy.
U.S. stocks ended a shortened trading week caused by Hurricane Sandy with a selloff on Friday, and major indexes erased early gains sparked by a stronger-than-expected payrolls report.
(Reporting by Rodrigo Campos; Editing by Kenneth Barry)