By Saumya Vaishampayan
U.S. stock futures fell Tuesday, on the heels of declines in
Europe and China, as investors continued to focus on corporate
earnings.
S&P 500 futures lost five points, or 0.3%, to 2099. E-mini
Dow futures declined 53 points, or 0.3%, to 17937. E-mini
Nasdaq-100 futures slipped three points, or 0.1%, to 4521. Changes
in stock futures don't always accurately predict moves in the stock
market after the opening bell.
In Europe, France's CAC 40 fell 1.4% and Germany's DAX declined
1%.
Stocks in China fell sharply after the country's securities
regulator issued another warning to investors on the market's
risks. The Shanghai Composite Index fell 1.1%. After markets
closed, The Wall Street Journal reported that China's central bank
is planning to launch fresh easing measures targeting the country's
mounting local-government debt problems.
Investors focused on several earnings reports on Tuesday
morning. Including results from 233 companies in the S&P 500,
first-quarter earnings are on track to fall 1.8% from a year
earlier. Earnings had been expected to decline 4.6% going into the
reporting season, pressured by a strong dollar and weak oil
prices.
"We've seen how much the dollar has rallied and it has been
widely discussed," said Jack Caffrey, equity portfolio manager at
J.P. Morgan Private Bank. "The fact that the strong dollar is
impacting results...is becoming a little less of a shock," he
added.
Instead, he said he's more focused on the outlook for margins
and how they will be affected by an eventual pickup in wage growth.
A decline in margins by itself doesn't cloud the outlook for
corporate profits, he said.
"To the extent that we may wind up with some labor cost
pressure, that's ultimately more money in the pocket of the
consumer," he said. That could boost consumer spending and lead to
higher revenue growth, he added.
The Federal Reserve's two-day policy meeting begins Tuesday. In
economic news, reports on home prices and consumer confidence are
due.
In earnings news, Aetna Inc. boosted its profit outlook for 2015
again on Tuesday as the health insurer reported
better-than-expected earnings in the latest quarter. Shares added
nearly 2% premarket.
Apple Inc. said Monday it sold 61.2 million iPhones in the three
months ended March 28, up 40% from the year-ago period. Strong
iPhone demand boosted Apple's profit, which increased 33% to $13.57
billion in its fiscal second quarter. Revenue rose 27% to $58.01
billion. Shares rose 2.2% premarket as results topped
expectations.
Merck & Co. raised its earnings guidance for the year as its
first-quarter results declined less than expected. Shares rose 4.4%
premarket.
Ford Motor Co. said net income declined 7% in the first quarter
as profitability in North America and Asia was offset by losses in
Europe and South America. Shares slipped 0.9% premarket.
In commodity markets, gold futures inched down 0.1% to $1202.50
an ounce. Crude-oil futures fell 0.4% to $56.77 a barrel.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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