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Nov 20, 2012

MarketWatch | U.S Futures Indications -November 20, 2012-: Stock futures flat; H-P, housing starts in focus

By Barbara Kollmeyer, MarketWatch 

MADRID (MarketWatch)—U.S. stock market futures pointed to flat start for Wall Street on Tuesday, with sentiment dulled after Moody’s Investors Service stripped France of its triple-A credit rating. Housing starts and Hewlett-Packard Co. results are ahead for investors. 

Futures for the Dow Jones Industrial Average DJZ2 +0.02% fell 3 points to 12,737, while those for the Standard & Poor’s 500 index SPZ2 +0.12% rose 0.3 point to 1,382.80. Futures for the Nasdaq 100 index NDZ2 +0.12% rose 3 points to 2,588.50. 

Dow ends up more than 200 points The Dow Jones Industrial Average staged a triple-digit advance as investors looked for signs of a compromise in Washington on the impending “fiscal cliff.“ Photo: Reuters. 

Late Monday, Moody’s Investors Service downgraded France one notch to Aa1, partly on concern about the country’s fiscal outlook, saying its resilience to “future euro-area shocks” is becoming tougher to predict. Read: Moody's strips France of its triple-A rating 
Analysts said the Moody’s move brings its rating in line with Standard & Poor’s, which downgraded France earlier this year. Analysts at Deutsche Bank noted there are only nine Aaa rated sovereigns, on Moody’s scale, left in continental Europe. 

That move came ahead of a meeting by euro-zone finance ministers where traders hope officials will give the all-clear for Greece to get its next tranche of aid money. Europe stocks were lower. Read: Europe stocks weaken after France downgrade 
Meanwhile, investors will get another measure on the state of the U.S. housing market, with data on construction of new homes due to be released at 8:30 a.m. Eastern time. Economists polled by MarketWatch are forecasting housing starts slipped to 825,000 from a prior 872,000.
A speech by Fed Chairman Bernanke, to the Economics Club of New York at 12:15 p.m. Eastern, will command market attention as well. Read: Bernanke to defend ultra-easy policy 

The fiscal cliff issue, of course, remains the central focus for investors. Wall Street stocks notched their best session in two months on Monday, with global stocks following, after increasing hopes a deal would be reached over the U.S. budget. The Dow Jones Industrial Average DJIA +1.65% surged 207.65, or 1.7%, to 12,795.96.
“This large global move was all on the back of vague comments that the cross party talks were ‘constructive,’ said Jim Reid, strategist at Deutsche Bank in a note to investors. “Such a move on so little shows how crucial this issue is and markets could still be 5-10% either way before year-end depending on the nature of these discussions.”
On the corporate front, Hewlett-Packard HPQ +3.50% is expected to report fiscal fourth-quarter earnings of $1.14 a share, according to analysts polled by Thomson Reuters. Those results are scheduled for ahead of the opening bell. Read: Big earnings on Tuesday: Hewlett-Packard, Best Buy
Also reporting Tuesday: Best Buy Co. BBY 0.00% , H.J. Heinz Co. HNZ +1.12% , Hormel Foods Corp. HRL +1.39% and Campbell Soup Co. CPB +0.85% .
In other markets, stocks in China and Japan finished lower, with sentiment dented by the Moody’s downgrade of France. Read: Hong Kong, Tokyo stocks fall as Seoul, Sydney rise
Crude-oil prices eased 38 cents, while gold was largely flat.

Barbara Kollmeyer is an editor for MarketWatch in Madrid.

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