Dow May Open Flat on Earnings Watch


LONDON -- Stock index futures at 7 a.m. EST indicate that the Dow Jones Industrial Average may open up by just six points this morning, while the S&P 500 may open unchanged.

Today's economic calendar is limited to the NFIB Small Business index for December at 7:30 a.m. EST and the consumer credit report for November at 3 p.m. EST. The real news will be the first of the corporate earnings reports -- and investors are expecting another lackluster performance. A Thomson Reuters survey found that the S&P 500 is expected to have delivered overall earnings growth of just 2.8% in the final quarter of last year.

The first of the big names to report earnings will be Monsanto, which is expected to report before markets open. Analysts are expecting a modest increase in profit, with consensus forecasts suggesting fourth-quarter earnings per share of $0.37 on revenue of $2.6 billion. Alcoa is the big name of the day, but the aluminum maker is not due to report until after the bell tonight, when analysts expect it to post earnings of $0.06 per share on revenue of $5.6 billion. Other companies due to report today include Schnitzer Steel, IHS, and Global Payments.

Other companies whose stock could be actively traded today include Sears Holdings, which announced late yesterday that its chief executive, Louis D'Ambrosio, will step down due to health reasons. The company also updated its guidance to forecast a loss of between $2.64 and $3.40 per share for the current quarter. Yum! Brands may also be active; its stock fell more than 5% in German trading this morning after the company, which owns the KFC brand, said it expects revenue from KFC stores in China to fall by 6% in the current quarter, below its previous forecast of 4%.

European markets
European markets edged higher this morning despite new data showing that eurozone unemployment reached a new record of 11.8% in November. Youth unemployment in the single-currency area is now 23.7% -- although this average masks a huge divide between Spain and Greece, where youth unemployment is greater than 55%, and Germany, Austria, and the Netherlands, where it is less than 10%. In other news, German industrial orders fell by 1.8% in November, and eurozone retail sales rose by 0.1% in November, leaving them 2.6% lower than they were one year ago.

At 7:30 a.m. EST, the DAX was up 0.12%, the CAC 40 was up 0.63%, the FTSE MIB was up 0.91%, and the IBEX 35 was up 0.84%. In London, the FTSE 100 was up by 0.24%. Topping the leaderboard were Vodafone , which gained 2.5% following a report in The Wall Street Journal that Verizon Communications might buy Vodafone's stake in Verizon Wireless, and miner Anglo American, which gained 2.3% after confirming that AngloGold Ashanti CEO Mark Cutifani will take over from Cynthia Carroll as the group's chief executive.

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Roland Head owns shares in Vodafone but does not own shares in any of the other companies mentioned in this article. Motley Fool newsletter services have recommended buying shares of Vodafone Group. Motley Fool newsletter services have recommended creating a synthetic covered calls position in Monsanto. 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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