By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) — U.S. stock index futures traded near unchanged
Monday, with investors awaiting the kickoff of earnings season and
bracing for further fiscal brinkmanship as euphoria faded over a partial
budget deal last week.
Futures on the Dow Jones Industrial Average
DJH3
-0.12%
fell 16 points, or 0.1%, to 13,330, while S&P 500 Index futures
SPH3
-0.15%
declined 1.5 points to 1,456.20.
Nasdaq 100 futures
NDH3
-0.06%
lost 1.25 points, or less than 0.1%, to 2,711.75.
“After the upbeat start to 2013, equity markets seem to be struggling to
maintain the momentum… and with more posturing from the Republican
party over the weekend in the taxes versus spending debate, the risk is
that the U.S. budget situation is once again poised to suppress any
enthusiasm from traders,” said Fawad Razaqzada, market strategist at GFT
Markets in London.
Senate Minority Leader Mitch McConnell, the upper chamber’s top
Republican, on Sunday said further tax changes were off the table and
that spending cuts should be the nation’s top priority. The remarks came
a day after President Barack Obama linked reduced federal spending to
higher taxes through changes in the tax code.
See McConnell: tax issues over; spending cuts next
.
The latest round of sparring came after Obama and congressional
Republicans reached a last-minute deal to hike tax rates for couples on
annual income that exceeds $450,000. The deal allowed Washington to
avoid steep spending cuts and tax hikes commonly referred to as the
fiscal cliff.
The agreement, however, merely delayed automatic spending cuts until
March 1 and left open negotiations over raising the nation’s debt
ceiling, which must be done by late February or early March.
The deal helped spark a broad relief rally, with the Dow industrials
DJIA
+0.33%
rising 3.8% for the week.
Meanwhile, investors will also turn their attention to corporate
earnings, while looking for any indication Washington’s
headline-dominating budget standoff crimped profits in the final quarter
of 2012.
See: Did cliff hit profits? These stocks may tell
.
As is tradition, aluminum producer Alcoa Inc.
AA
+2.09%
will provide the unofficial kickoff to earnings season after Tuesday’s
market close. Analysts have sharply curtailed expectations for the
materials sector, including Alcoa.
Analysts surveyed by FactSet forecast earnings of 22 cents a share, compared with 25 cents at the end of September.
Meanwhile, bank shares may be in focus Monday after global regulators
over the weekend watered down and delayed implementation of tougher new
liquidity requirements.
Bank shares jumped in an otherwise downbeat Europe.
See: Europe stocks drop after rally; banks rise
.
China’s sovereign-wealth fund, China Investment Corp., isn’t looking to buy a stake in German car maker Daimler AG
DE:DAI
+1.13%
, The Wall Street Journal reported on Monday, citing people with direct knowledge of the matter.
See: CIC not in talks to buy Daimler stake: report
.
Chinese media over the weekend had said CIC was looking to acquire a 4% to 10% stake in Daimler.
Senate Minority Leader Mitch McConnell, R-Ky.
Asian stocks traded mostly lower Monday, as investors paused after starting 2013 with a rally.
See: Asia stocks pause after strong start to 2013
.
No major economic reports are set for release Monday and the calendar
remains extremely light for the rest of the week. The highlights, such
as they are, include weekly jobless claims data on Thursday and figures
on the trade deficit and import prices on Friday.
See: U.S. out of slow lane, but can't find fast lane
.
Nymex crude-oil futures
CLH3
-0.52%
fell 40 cents to $93.11 a barrel in electronic trade.
Gold futures
GCG3
+0.29%
advanced $5.60 to trade at $1,654.50 an ounce.
The dollar index
DXY
+0.09%
, a measure of the U.S. currency against a basket of rivals, rose 0.1% to 80.561.
William L. Watts is MarketWatch's European bureau chief, based in Frankfurt. Follow him on Twitter @wlwatts.
