Dow futures were down over 100 points during overnight trading despite the Oracle’s announced bid to take over Sun Microsystems.
What To Watch For In The US Session
• Oracle Buys Sun Microsystems
• Earnings Season In Full Force
• Leading Indicators On Tap
Futures Pointing Toward Lower Open, Despite Oracle’s Purchase Of Sun Microsystems
Dow futures were down over 100 points during overnight trading despite the Oracle’s announced bid to take over Sun Microsystems. Trades are expected to remain cautious this week as 40% of the Dow and 25% of the S&P report earnings which may set the tone for price action over the medium-term. Bank of America reported better than expected earnings today of $0.44 versus expectations of $0.04. However, most of the gains were from one-time charges which have diluted the results. Nevertheless, the positive results is a sign that banks are at least starting to generate profits and getting back to the core business of lending to businesses and consumers. Eli Lilly and Halliburton also reported stronger than expected results which could help start to build optimism if other blue chip names follow suit. The leading indicators report for March is the only release on the fundamental calendar. The forward looking gauge is expected to fall another 0.2% signaling that we should see weakness over the next three months.
Dow Jones 8131.33
The DJIA is expected to stumble out of the open as there still remain concerns over the banking sector and what the earnings season may ultimately hold. Therefore, we could see volatility this week as markets digest the slew of data scheduled to cross the wires.
NASDAQ 1673.07
The Nasdaq futures are also significantly lower in overnight trading despite the Oracle Sun Microsystems deal. We could see some profit taking in the tech laden index as it has erased all of it losses fro the year. However, the merger between the two tech giants is a positive sign for markets and the sector which could help reverse sentiment.
S&P 500 869.60
The broader index should also remain under pressure ahead of many of its components reporting as traders are fearful that the recent rally may have been a bit overdone and weak corporate profits may bring the sobering reality that the economy is far from recovering.
