Dow Poised To Start Lower On Mixed Earnings

LONDON — Stock index futures at 6.30am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open down by 0.27% this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open 0.33% lower.

European markets were mixed this morning. In France, media and telecoms heavyweight Vivendi rose by 2% on news that it has reached a deal to sell 85% of its stake in video games maker Activision Blizzard, while luxury goods group LVMH was up 4.4% after reporting a 9% increase in organic sales during the first quarter. The French market also received a boost when July’s consumer confidence figures came at 82, ahead of expectations for a reading of 79. At 6.30am ET, the FTSE 100 was down 0.14%, the DAX was down 0.45% and France’s CAC 40 was up 0.45%.

In the US, today’s economic reports include July’s consumer sentiment report at 9.55am ET, which is expected to show a marginal increase to 84, from 83.9 in June.

Earnings season continues today, although fewer companies are scheduled to report than usual. Earlier this morning, gold miner Newmont Mining Corp reported an unexpected $2.1bn second-quarter loss, after taking a $2.3bn write-down on certain of its assets, which it says was made necessary by falling gold prices. Tyco International reported earnings from continuing operations of $0.50 per share, narrowly beating analysts’ expectations for earnings of $0.48 per share. Stanley Black & Decker reported adjusted second-quarter earnings of $1.21, inching ahead of analysts’ expectations for $1.20 per share, while oil and gas drilling contractor Helmerich & Payne reported third-quarter earnings of $2.32 per share, beating analysts’ forecasts for earnings of $1.35 per share.

Expedia stock was down by 24% in after-hours trading last night and may be heavily sold this morning, after the internet travel firm’s second-quarter earnings missed expectations. Zynga stock was down 17% in pre-market trading and is expected to fall, after the company said that its monthly active users fell by 40% in the second-quarter, and that it had decided to withdraw from the US online gaming industry, in which it has been trying to build a presence. Heading the other way, both Starbucks and Cliffs Natural Resources may be in demand, after reporting quarterly results that beat estimates.

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.