Stock Futures Flat as Investors Parse Bank Earnings
Stock futures were flat on Tuesday, pointing to some consolidation for Wall Street after a bruising prior-day session. Investors will be kept busy with earnings from J.P. Morgan Chase & Co., retail sales data and a couple of Federal Reserve speakers all on the docket.
Futures for the Dow Jones Industrial Average inched up 5 points to 16219, while those for the Standard & Poor's 500 index rose 1.4 points to 1816.30. Futures for the Nasdaq 100 index added 2.25 points to 3511.50.
Ahead of data, earnings from J.P. Morgan (JPM) and Wells Fargo & Co. (WFC) will hit the market. Analysts polled by FactSet expect J.P. Morgan to report fourth-quarter earnings of $1.24 per share on revenue of $23.85 billion. Wells Fargo is expected to post earnings of 99 cents on revenue of $20.68 billion.
As for the economy, retail sales data for December are due at 8:30 a.m. EST, with economists polled by MarketWatch forecasting a decline of 0.1% and a gain of 0.4% excluding autos.
Also on Tuesday, the monthly small-business survey by the National Federation of Independent Business is scheduled for release at 7:30 a.m. EST. Import prices for December will hit an hour later, with business inventories for November coming at 10 a.m. EST.
But that's not all. Federal Reserve Bank of Philadelphia President Charles Plosser and Dallas Fed President Richard Fisher are due to speak on the economy at 12:45 p.m. EST and 1:20 p.m. EST respectively, according to FactSet Research.
Stephen J. Guilfoyle, chief economist at Sarge986.com, said investors should be wary of these speakers after Monday's action, in which comments from Atlanta Fed President Dennis Lockhart about a further cut in stimulus helped trigger the worst losses for benchmark indexes in several months.
"Both are common-sense, no BS, hawkish economists," Mr. Guilfoyle said in a note on his website Monday. "Although I like their style, this may be a tough time for the markets to deal with more Fed speak like that. We shall see. At least whatever hits us...will hit us in the face."
On Monday, the Dow industrials closed down 179.11 points, or 1.1% to 16257.94. The S&P 500 index shed 1.3% to 1819.20, and the Nasdaq Composite lost 1.5% to 4113.30.
Strategists at Credit Suisse say technical levels don't look too bad for the indexes, despite Monday's rough session. But if markets head further south, they are watching for these key psychological levels: 1,800 on the S&P 500, 3,500 on the Nasdaq 100 and 16,000 on the Dow industrials.
David Buik, market commentator at Panmure Gordon & Co., said in emailed comments that markets are seeing a "very natural and much needed correction," which won't likely last too long.
"All in all, equities remain the most attractive asset class if interest rates are to remain low. Dividends are good, even if values taper a tad," Mr. Buik said.
Overseas, the Nikkei 225 index closed down 3%, though the Shanghai Composite index gained 0.9%. European stocks were also posting losses.
Across other markets, gold prices were drifting south and crude oil was trading higher. The dollar was pressing higher across a basket of six major rivals.
Other stocks will also be worth watching on Tuesday: Google Inc. (GOOG) shares may be in focus after the search engine said it will buy home-automation company Nest Labs Inc. for $3.2 billion.
Time Warner Cable Inc. (TWC) shares may see action. The cable provider said late Monday that its board of directors has "unanimously rejected a third, grossly inadequate, proposal" by Charter Communications Inc. (CCMMV). Earlier in the day, Charter had said it would offer Time Warner shareholders about $132.50 a share in cash and stock.