Dow Futures Suggest a Calm Day of Trading


LONDON -- Stock index futures at 7 a.m. EDT indicate that the Dow Jones Industrial Average may open down by a nominal five points this morning, while the S&P 500 looks set to stall right out of the gate, moving less than a point as investors wait for this Friday's jobs report before committing to new positions.

European stock markets rose this morning as yesterday's weaker U.S. data fueled expectations that the Federal Reserve's monetary-stimulus program will continue at its present rate for some time to come. In Europe, the latest inflation figures showed that prices have fallen across the eurozone. Factory gate prices -- i.e., raw material costs -- were down by 0.6% in April, while energy prices fell by 1.6% in April, leaving them 2% lower than in April 2012. There was also good news in Spain, where the country's Labor Ministry said unemployment had fallen by 98,265 in May -- almost twice the normal seasonal fall of about 55,000.

In the U.S. today, the latest trade deficit figures are expected to show that the deficit widened from $38.8 billion to $41.5 billion in April, casting some doubt on how well U.S. exports are recovering. No other major data is due, and corporate earnings are restricted as well, which could leave markets struggling to find direction today. However, if the Dow Jones closes up today, it would be the 21st consecutive Tuesday that the benchmark index has delivered a gain, according to CNN.

Among the companies that released earnings before the opening bell today, Dollar General reported first-quarter earnings of $0.67 per share on revenue of $4.24 billion, falling short of EPS estimates of $0.71 and matching sales forecasts. The company also revised its full-year EPS forecast from a range of $3.15 to $3.30 down to a range of $3.15 to $3.22. The company's stock is down almost 5% in premarket trading, though it has gained 25% year to date.

Companies due to report after the bell include Bob Evans Farms, Analogic, and Mattress Firm Holding, which is expected to report first-quarter earnings of $0.36 on sales of $274.4 million.

General Motors stockis also likely to be in demand when markets open after the company announced last night that it will replace H.J. Heinz in the S&P 500 following Heinz's recent sale to Warren Buffett's Berkshire Hathaway, which is expected to close on Friday. General Motors stock is 2.7% higher in premarket trading.

Finally, let's not forget that the Dow's daily movements can add up to 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." If you, like Buffett, are convinced of the long-term power of the Dow, you should read "5 Stocks To Retire On." Your long-term wealth could be transformed, even in this uncertain economy. Simply click here now to download this free, no-obligation report.

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Roland Head has no position in any stocks mentioned. The Motley Fool recommends Berkshire Hathaway, General Motors, and H.J. Heinz Company. The Motley Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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