NEW YORK – Wall Street was poised to open slightly higher on Wednesday after Alcoa got the earnings season under way with better-than-expected revenue and an encouraging outlook for the year.
Alcoa Inc said it expects global demand for aluminum will continue to grow in 2013, though the company kept a cautious tone as worries lingered over a looming U.S. budget confrontation. Shares of Alcoa, the largest aluminum producer in the United States, rose 1.7 percent to $9.25 in premarket trade.
Still, investors are wary about the outcome of the fourth-quarter earnings season. Profits were expected to beat the previous quarter's lackluster results, but analyst estimates were down sharply from where they were in October. Earnings were expected to grow by 2.7 percent, according to Thomson Reuters data.
Equities have pulled back over the last two sessions from last week's rally, which was spurred by the "fiscal cliff" deal in Washington.
"With the euphoria of the fiscal cliff deal wearing off, the market is looking for the next positive theme and the hope is that earning season can fill that need," said Andre Bakhos, director of market analytics at Lek Securities in New York.
"With expectations muted, any semblance of decent numbers could provide a robust upside potential."
Among other earnings, Constellation Brands , whose labels include Robert Mondavi and Ravenswood wines, rose 4 percent to $37.50 after it reported higher profit.
But on the downside, Apollo Group Inc slid more than 10 percent after it reported lower student sign-ups for the third straight quarter and cut its operating profit forecast for 2013. Apollo's shares were indicated at $18.84.
S&P 500 futures rose 1.7 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 added 15 points, and Nasdaq 100 futures gained 1.5 points.
Dish Network Corp late Tuesday announced a bid for Clearwire Corp that trumped Sprint Nextel Corp's $2.2 billion offer, setting the stage for a battle over the wireless service provider.
Clearwire was up 7.2 percent at $3.13, while Sprint lost 2.5 percent to $5.82.
Hard drive maker Seagate Technology rose 2.7 percent to $32.25 after it raised its second-quarter revenue forecast.
Apple Inc is working on a lower-end iPhone, the Wall Street Journal reported, citing sources. The report comes as Apple's chief executive meets with partners and government officials in China.
Goldman Sachs Group Inc and Morgan Stanley are among a group of banks expected to agree as soon as this week to a $1.5 billion settlement with U.S. regulators over botched foreclosure claims, sources told Reuters on Tuesday.
(Editing by Kenneth Barry)