Stocks futures move higher as investors prepare for earnings, economic data

Stocks futures move up ahead of busy earnings week

NEW YORK — Stock futures traded higher Monday morning as investors brace for a crush of earnings reports, including key readings from the banking sector, this week.

Futures have moved higher throughout the morning as European markets also gained strength after Asian markets tumbled overnight.

Investors have been cautious as they prepare for earnings reports this week, including from some of the nation’s largest financial firms. Banks have been among the hardest hit companies since the recession began in late 2007 as investment and loan losses piled up.

“People are focused on sectors battered the most to see if there is any bounceback,” said Dan Deighan, founder of Deighan Financial Advisors in Melbourne, Fla. Financial firms and retail companies will probably be the most closely watched sectors as earnings reports are released, Deighan said.

The nation’s largest banks — Goldman Sachs Group Inc., JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. — are all scheduled to report second-quarter results this week.

Commercial finance lender CIT Group Inc., meanwhile, said late Sunday it is talking with regulators about ways to improve its short-term liquidity as recent losses may jeopardize its compliance with capital requirements.

Earnings reports are also expected from major companies in non-financial industries as well this week, including Dow Jones industrial average components Johnson & Johnson, International Business Machines Corp. and General Electric Co. and technology bellwethers Intel Corp. and Google Inc.

The earnings results will give investors a chance to see if there was any meaningful economic improvement during the second quarter. But second-quarter results aren’t expected to be stellar, so investors will instead focus on executives’ “optimism or pessimism moving forward,” Deighan said. Stocks rallied in the spring amid hope of an eventual recovery in late 2009. Investors want evidence that timetable will be met and corporate outlooks could provide it.

Ahead of the opening bell, Dow futures rose 53, or 0.7 percent, at 8,138. Standard & Poor’s 500 index futures rose 7.20, or 0.8 percent, at 881.50, while Nasdaq 100 index futures rose 9.25, or 0.7 percent, at 1,425.25.

A host of economic data during the week will also provide some insight into the economy. Investors will get readings on inflation, retail sales, industrial production and housing starts throughout the week.

Last week, stocks continued a four-week slide as the Dow dropped to 8,147, its lowest level since April 28. Investors have been giving back some of the 40-percent gains picked up during a vigorous rally during the spring. Concerns have been mounting that the rally was overdone and investors are now waiting for fresh signs the economy is actually on the mend instead of just weakening at a slower pace.

Bond prices were mixed Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.28 percent from 3.30 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.18 percent from 0.16 percent late Friday.

The dollar was mostly lower against other major currencies, while gold prices fell.

Overseas, Japan’s Nikkei stock average fell 2.6 percent. In afternoon trading, Britain’s FTSE 100 rose 1.2 percent, Germany’s DAX index gained 1.7 percent, and France’s CAC-40 rose 1.5 percent.