Dow May Start Week Higher


LONDON -- Stock index futures at 8 a.m. EST suggest a fairly flat start for both major indexes. The Dow Jones Industrial Average may open up by 0.1%, while the S&P 500 may open 0.2% higher.

Today's economic data is limited to December's New York Fed Empire State Survey, which is due at 8:30 a.m. EST and is expected to show a fall of one point, which is an improvement on the previous month's reading of -5.2. Investors are likely to remain cautious, given the lack of progress on the fiscal cliff, but sentiment may be boosted slightly by the outcome of the weekend's elections in Japan, which looks likely to trigger a new round of efforts to stimulate the Japanese economy. Japan's new Prime Minister, Shinzo Abe, is targeting 2% inflation, and the Bank of Japan is expected to ramp up money-printing activities to try to return the country's economy to growth.

In corporate news, Apple shares could be actively traded today. The company said it had sold 2 million units of the iPhone 5 in China in the three days following its launch there, but Citigroup has lowered its target price for the company from $675 to $575, downgrading it from "neutral" to "sell." The broker said supply chain cuts suggested weakening demand for the company's flagship iPhone product. Bloomberg figures show that the iPhone was responsible for more than 50% of Apple's revenue in the year to September. Apple shares were down 2.3% in German trading at 7 a.m. EST and are now trading at their lowest level since March.

European markets
Most European markets edged lower this morning, despite news that the eurozone delivered a trade surplus of 10.2 billion euros in October, up from 700 million euros in October 2011. Exports were up 14% by value, while imports rose 7% by value. Exports to the U.S. were up 13%, but exports to India, a key market, fell by 5%.

At 8 a.m. EST, the DAX was down just 0.1%, the CAC 40 was down 0.37%, the FTSE MIB was up 0.1%, and the IBEX 35 was at breakeven. In London, the FTSE 100 was down 0.57%, led by temporary-power specialist Aggreko, whichplunged by 17% after warning that the outlook for 2013 was "uncertain."

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