Wall Street set to start Election Day on higher note

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Published November 06, 2012

| Reuters

Stock index futures pointed to a higher open on Tuesday, putting the S&P 500 on track for a second straight advance as Americans went to the polls to elect the country's president.

Polls showed President Barack Obama and Republican challenger Mitt Romney neck-and-neck in a race that will be decided in a handful of battleground states. A change in political leadership could affect sectors such as healthcare, energy and financials.

Investors will also closely watch races in the Senate and House of Representatives that will affect the "fiscal cliff," or $600 billion in spending cuts and tax increases that are set to be automatically triggered at the end of the year unless a deal is reached between Congress and the White House.

Trading volume is expected to light unless investors can gain some certainty about the emerging political picture.

"We do know this much, though, the resident in the White House may change, the face of Washington is still going to be one of tremendous gridlock, discord, and dysfunction and markets are going to force Washington to come to terms with the dysfunction." said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

"One way or the other, markets are going to dictate that the fiscal cliff gets addressed."

S&P 500 futures rose 4.8 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 gained 33 points, and Nasdaq 100 futures added 12.25 points.

Fossil Inc slumped 9.9 percent to $84.83 in premarket trade after the fashion accessories maker posted lower-than-expected quarterly revenue due to a fall in sales in Europe and a stronger dollar.

NYSE Euronext , the world's largest stock market, is hoping ambitious cost cuts will help offset lower trading levels in the latest sign of growing pressure on the world's top trading firms.

Express Scripts Holding Co plunged 11.5 percent to $55.66 in premarket action after the pharmacy benefits manager said analysts' forecasts for its 2013 results were too aggressive, casting doubt on how well it is integrating its $29 billion purchase of Medco Health Solutions Inc.

Zillow Inc tumbled 15.6 percent to $29 in premarket trading after the real estate website forecast fourth-quarter revenue below analysts' estimates. The company lost one of its larger advertisers, Foreclosure.com.

According to Thomson Reuters data through Monday morning, of the 387 companies in the S&P 500 that have posted earnings, 61.8 percent have topped Wall Street expectations, roughly in-line with the 62 percent quarterly average since 1994 and below the 67 percent average over the past four quarters.

But corporate revenue has disappointed investors, with only 38.1 percent of companies besting analyst expectations, well below the 62 percent quarterly average since 2002 and the 55 percent average over the past four quarters.

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)

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