Flat start watching profit reports, stimulus progress
U.S. stocks are expected to open flat as investors wade through a flood of earnings reports and watch for updates out of Washington on the stimulus package. In overseas trading, Europe markets were steady and Asia was mixed after the Bank of Japan promised to pump $11 billion into banks and Australia’s central bank slashed interest rates. The Dow is expected to open steady, while the Russell 2000 (NYSE:IWM) is seen slightly higher near the key swingline of 450.00.
Among the bevy of quarterly results already in the mix ahead of the opening, Merck & Co. (NYSE:MRK) beat the forecast and was higher in pre-market trading; AFLAC Inc. (NYSE:AFL) said they wouldn’t need to raise cash and also trended higher. On the soft side of things, Dow Chemical Co. (NYSE:DOW) missed the forecast and fell some 5% in pre-market action; SanDisk Corp. (Nasdaq:SNDK) missed the sales projection and will issue stock to raise capital, which sparked a slide in the maker of memory cards for digital cameras.
Carmakers will release sales figures today, which could move stocks not just for automakers, but also for the general market. The market is already anticipating some of the worst car sales numbers on record, so the bar is set pretty low as it is. Pending home sales data also comes out at 10:00 a.m. ET.
Crude oil prices were slightly higher in choppy trade ahead of the open; energy markets were a drag on overall performance Monday, but appear to be on more steady footing coming into today’s session.
Looking at the chart picture for today, small caps will be testing that key zone around 450 right off the bat. A decisive push back above that point would see resistance along 453.50, then at 459 and 462. Meanwhile, support is pegged at 445.50, then at 439.50.
