Cautious Start Likely for Dow and S&P


LONDON -- The Dow Jones Industrial Average (INDEX: ^DJI) and the S&P 500 (INDEX: ^GSPC) are expected to open slightly lower this morning after Friday's strong gains. With no economic major news due today, all eyes will be on corporate earnings and eurozone developments.

Companies that may be active in trading today include oil supermajor Chevron, which announced a $2 billion investment program for its Lianzi oil field in Africa on Sunday. Investors may also show interest in General Motors, which has ousted its head of global marketing after less than two years.

Major companies due to report earnings today include Anadarko Petroleum, Eastman Chemical Company, Jacobs Engineering Group and Franklin Resources. Loews reported early this morning with a shock fall in earnings that came in 81% below analysts' expectations, suggesting the company's shares could be actively traded when markets open.

There's no denying that hopes of central bank stimulus and market intervention to ease the eurozone crisis have driven recent market gains. In Europe, all major markets continued to rise this morning, with Italy's FTSE MIB index performing best with a 2.2% gain on the back of a successful bond auction this morning, at which the country managed to sell 10-year bonds at a yield of 5.96% -- down from 6.2% last month and the lowest since April.

Elsewhere, Greece's Athex Composite Share Price Index was also up by 1.8% at 7 a.m. EDT, while France's CAC was up 0.6%, Germany's DAX was up by 0.8%, and Spain's IBEX index was up by 1.8% despite news that Spanish GDP fell by 0.4% during the last quarter.

In London, the FTSE 100 (INDEX: ^FTSE) was up by 0.5% at the end of the morning session, driven mostly by gains in resource and financial stocks, with Barclays rising 2.75% on heavy volumes. HSBC (NYS: HBC) also rose after it released its half-yearly report, despite a fall in net income to $8.44 billion from $9.2 billion during the same period last year. The company also apologized for its past mistakes and announced that it has set aside $2 billion to cover the cost of fines and lawsuits relating to recent problems.

However, neither HSBC nor Barclays is the FTSE 100 company that recently persuaded billionaire Warren Buffett to invest more than $1 billion. The legendary investor recently bought another famous British name with global expansion potential -- and you can discover the identity of the company and the price he paid in this special exclusive report. Best of all, the report is free, so download it today while it's still available.

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Roland Head owns shares in HSBC but no shares of the other companies mentioned. Motley Fool newsletter services have recommended buying shares of General Motors and Chevron. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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