NEW YORK (TheStreet) -- Stock futures were a touch higher Tuesday amid further signs of gridlock in talks over the "fiscal cliff" in the U.S. and as investors awaited more clarity on the issue of a single banking supervisor for the European Union.
Futures for the Dow Jones Industrial Average were rising 14 points, or 15.40 points above fair value, at 12,964. Futures for the S&P 500 were up 1.60 points, or 1.14 points above fair value, at 1408. Futures for the Nasdaq were up 2.75 points, or 3.31 points above fair value, at 2672.
In one of the latest developments in the U.S. budget negotiations, the White House rejected a counteroffer by Republicans Monday on tax and spending cut proposals, explaining that it would not fulfill President Barack Obama's promise to increase tax rates on the richest Americans.
"In recent years, negotiations over fiscal policy have followed a familiar pattern," said Jeremy Lawson, senior economist at BNP Paribas. "Phase 1 (the honeymoon) involves Democrats and Republicans making soothing noises about the importance of working together and expressing guarded optimism about getting a deal done. This quickly gives way to Phase 2 (the confrontation), during which both parties' rhetoric hardens as they play to their bases and seek to gain the upper hand in the court of public opinion. Phase 3 (the bargain) only begins at the 11th hour when the two sides take negotiations more seriously as they try to avoid an outcome that neither party really wants.""The latest news on the fiscal cliff negotiations suggests that we have moved into the confrontation phases," said Lawson. The major U.S. stock averages fell Monday after a slump in manufacturing outweighed upbeat eurozone developments and manufacturing data from China. No major U.S. economic releases were scheduled for Tuesday. The FTSE 100 in London was up 0.04% on Tuesday, while the DAX in Germany was rising by 0.32% as investors awaited developments from the European Union finance ministers meeting in Brussels on the topic of a European Union single banking supervisor. Reportedly, so far there has been much friction between member states over the details of the plan. Asian markets finished mixed as investors digested the weak U.S. manufacturing report from Monday and the stalemate in the budget negotiations. Japan's Nikkei average closed down 0.27% and Hong Kong's Hang Seng index finished up by 0.15%. Gold for February delivery was plunging $16.90 at $1,704.20 an ounce at the Comex division of the New York Mercantile Exchange, while January crude oil contracts were down 75 cents at $88.34 a barrel. The benchmark 10-year Treasury was down 2/32, pushing the yield up to 1.632%. The dollar was off 0.25%, according to the U.S. dollar index. In corporate news, Oracle (ORCL) accelerated its upcoming dividend payments for three quarters. Shares were down 0.5%. Geron (GERN) said it would end development of GRN1005, an experimental brain cancer drug, and plans to undergo a restructuring that includes cutting its work force by 40%. It also said it plans to replace its chief financial officer. Shares were declining more than 18%. Cerberus Capital Management is in talks to join Virtu Financial's bid for brokerage Knight Capital Group (KCG), The Wall Street Journal reported, citing people familiar with the discussions. Knight Capital shares were rising more than 2%. Qualcomm (QCOM) plans to invest about $120 million in Sharp, the struggling Japanese TV maker. Shares were up 0.36%. Big Lots (BIG) posted a third-quarter loss of 10 cents a share on sales of $1.13 billion. Analysts forecast a loss of 24 cents a share on revenue of $1.14 billion. The retailer raised its outlook for the year. Shares were jumping more than 10%. AutoZone (AZO) reported Tuesday first-quarter earnings of $5.41 a share on revenue of $2 billion; analysts were expecting earnings of $5.39 a share on revenue of $2.02 billion. Margins improved at AutoZone during the quarter, but domestic same-store sales increased by a mere 0.2%. . AutoZone also announced that it has entered into an agreement to purchase the assets and select liabilities of AutoAnything, an online retailer of specialized automotive products. Shares were sliding over 2%. Pep Boys (PBY) said on Monday it swung to a third-quarter loss as revenue in the quarter fell 2.4% to $509.6 million. Same-store sales during the quarter decreased 2.7%. Shares were slumping over 6%. Struggling Finnish mobile-phone maker Nokia (NOK) plans to put its head office up for sale for €170 million as it aims to reduce costs and strengthen profitability. ADRs were up more than 1.5%. Toll Brothers (TOLL) shares were jumping by over 4% after the homebuilder booked stronger-than-anticipated fourth-quarter sales as the company saw cancellation rates decline and net signed contracts rise. -- Written by Andrea Tse in New York.
>To contact the writer of this article, click here: Andrea Tse. Follow @Commodity_Bull
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