Dow Futures Lower Ahead Of Earnings Reports

LONDON — Stock index futures at 7am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open down by 0.47% morning, while the S&P 500 (SNPINDEX: ^GSPC) may open down by 0.55%, suggesting that both indices could break a five-day run of gains. CNN’s Fear & Greed Index is expected to open in the greed zone at 64, today, after closing at 59 yesterday.

European markets moved lower this morning, as banking shares were hit by news that a European Central Bank asset quality review may require banks to increase their capitalisation. In London, big miners were also lower following news that bad debt write-offs tripled in China during the first half of the year, and that the Chinese government is allowing monetary supply to tighten in order to dampen inflation and house prices. At 7am ET, the FTSE 100 was down 0.45%, the DAX was down 0.43%, and the CAC 40 was down 0.96%.

Today’s US economic calendar features September’s import price index at 8.30am, which analysts expect to have risen by 0.2%, after remaining unchanged in August. At 10am, August’s FHFA home price index is scheduled.

Earnings season continues, and 38 S&P 500 companies are scheduled to report results today. Amongst those due to report before the opening bell are Boeing, Caterpillar, NASDAQ OMX, Dr Pepper Snapple Group, Airgas, AT&T and Bristol-Myers Squibb. Boeing is expected to report third-quarter earnings of $1.55 per share, while AT&T is expected to have earned $0.65 per share during the last quarter, according to analysts’ consensus forecasts. Earlier this morning, Eli Lilly reported third-quarter earnings of $1.11 per share, up by 41% from the same period last year, when the firm took a number of exceptional charges.

Other stocks that may be actively traded when markets open include Broadcom and Juniper. The two network equipment companies both issued downbeat full-year forecasts after last night’s close, and Broadcom fell by more than 8% in after-hours trading last night, while Juniper was nearly 2% lower. Netflix was down by 2.3% in pre-market trading and may fall when markets open, after Carl Icahn revealed last night that he had halved his stake in the firm, after earning a 457% profit in less than a year.

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.