LONDON — Stock index futures at 7am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open up by 2 points this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open unchanged. The Dow has fallen for the last four days and is down by 3.2% so far this month, although it remains above the 14,659 low seen during June’s market correction. CNN’s Fear & Greed Index has continued its slide into the fear zone, and is set to open at 28 today, after closing at 36 yesterday.
European markets fell this morning, as investors watched Asian markets close lower, and sold off mining and financial stocks. At 7am ET, the FTSE 100 was down 0.58%, the DAX was down 0.97% and the CAC 40 was down 1.31%. There was little in the way of economic news from the UK or eurozone, although figures published today showed that construction activity rose by 0.7% in the eurozone in June, following a 0.5% increase in May.
No major US economic reports are due today, but tomorrow’s publication of the latest Federal Open Market Committee (FOMC) minutes continues to cast a shadow over the markets, which is unlikely to be lifted by any positive earnings reports.
On a regular day, news that The Home Depot (NYSE: HD.US) beat expectations, with a 9% increase in second-quarter revenues, and a 23% increase in second-quarter earnings, would probably receive a more positive reception than it will today. The home improvement retailer is seen as a key beneficiary of the US housing recovery, and reported second-quarter earnings of $1.24 per share this morning, beating analysts’ consensus forecasts for $1.21 per share. Home Depot’s share price was up by 2.7% in pre-market trading, following publication of its results.
At 7.30am ET, J.C. Penney is expected to report a second-quarter loss of $1.07 per share. Other companies scheduled to report earnings before markets open this morning include Medtronic, Barnes & Noble, TJX and Best Buy Co, which is expected to report second-quarter earnings of $0.11 per share. Stocks that may be actively traded when markets open include Urban Outfitters, which rose by almost 7% in after-hours trading last night, after investors were impressed by the retailer’s rising profit margins.
Finally, let’s not forget the Dow’s daily movements can add up to some serious long-term gains. Indeed, Warren Buffett recently wrote: “The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions.“
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Roland does not own shares in any of the companies mentioned in this article.