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TheStreet Open House

Stock Futures Mixed Ahead of Tech Earnings, Housing Data

NEW YORK ( TheStreet) -- Stock futures were trading mixed as investors awaited a spate of earnings reports from tech giants and digested a number of reports from major U.S. firms early Tuesday.

Investors were digesting quarterly results from Johnson & Johnson (JNJ), DuPont (DD), Travelers (TRV) and Verizon Communications (VZ).

Boeing (BA) shares were sliding more than 1% on ongoing 787 aircraft safety concerns. Japanese and U.S. investigators have begun an investigation into the maker of the lithium-ion batteries used in Boeing's grounded 787 jets, The Associated Press reported.

Futures for the Dow Jones Industrial Average were down 15 points, or 26.70 points below fair value, at 13,561. Futures for the S&P 500 were down 1.50 points, or 3.23 points below fair value, at 1477. Futures for the Nasdaq were up 3.75 points, or 0.66 points above fair value, at 2737.

Stephen Guilfoyle, chief economist at sarge986.com, said in a morning note that while a there are a bevy of important earnings releases Tuesday morning and afternoon and money can be made in any number of those names, "we all know that the real bets are being placed on Google (GOOG) and IBM (IBM)," which release their earnings after the close and can be volatile.

"Actual dough will be made and lost on these two, especially Google," Guilfoyle noted. "The whispers in both cases are higher than the expectation, and many traders are already set up, or taking a pass."

Thomson Reuters said that as of Friday out of the 57 companies in the S&P 500 that reported fourth-quarter earnings, 58% booked earnings above analysts' expectations. This is lower than the long-term average of 62% and lower than the average over the past four quarters of 65%.

Fourth-quarter earnings are expected to grow 2.3% over the fourth quarter of last year, according to Thomson Reuters.

Thomson Reuters also said that 65% of companies, as of Friday, reported fourth-quarter revenue above analysts' expectations. This is higher than the long-term average of 62% and higher than the average over the past four quarters of 50%.

"As a firm we will continue to monitor corporate earnings but don't feel that there are an significant announcements next week that would change our view of the current market conditions," said Paul Pagnato, managing director and partner at HighTower's Pagnato-Karp Group. "We will be paying particular attention to the economic data that will be released."

The Chicago Federal Reserve's National Activity Index on Tuesday showed a decrease to 0.02 in December from 0.27 in November, indicating a moderation of economic growth last month.

The report also suggested subdued inflationary pressure from economic activity over the coming year.

The National Association of Realtors is expected at 10 a.m. EST Tuesday to report existing-home sales data for December. Economists surveyed by Thomson Reuters expect that existing-home sales rose to a seasonally adjusted annual rate of 5.1 million units in December, up from 5.04 million in November.

Hong Kong's Hang Seng closed up by 0.29%, and the Nikkei in Japan finished down 0.35% after the Bank of Japan introduced a widely expected open-ended asset purchase program and set a 2% inflation target.

European markets were down after Monday's advances, though were paring losses after a better-than-expected ZEW economic sentiment reading from Germany and Spanish debt auction results. The FTSE was down 0.04% and the DAX in Germany was down 0.37%.

Gold for February delivery was rising $5.40 at $1,692.40 an ounce at the Comex division of the New York Mercantile Exchange, while March crude oil futures were behind by 17 cents at $95.87.

The benchmark 10-year Treasury was falling 8/32, pushing the yield up to 1.878%. The dollar was slipping 0.34%, according to the U.S. dollar index .

In corporate news, DuPont posted fourth-quarter earnings of 11 cents a share on sales of $7.3 billion, topping the average analyst estimate of earnings of 7 cents a share on revenue of $7.26 billion. The company said its 2013 outlook for operating earnings is $3.85 to $4.05 a share, an increase of 2% to 7% over the prior year.

First half 2013 operating earnings are expected to decline modestly on a year-over-year basis.

Shares were rising more than 1%.

"DuPont stands stronger today than it did a year ago. Our segments delivered innovation, productivity and integration cost synergies. This, coupled with a record year in new product introductions, has strengthened our market position," said Ellen Kullman, CEO of DuPont. "However, weakness in markets served by Performance Chemicals and Electronics & Communications provided significant challenges in 2012. We've adjusted our plans to meet the changing market environment and grow our businesses in a slow-growth world economy."

Verizon reported fourth-quarter earnings of 38 cents a share on revenue of more than $30 billion, compared with the average analyst estimate of earnings of 50 cents a share on revenue of $29.83 billion.

Including the impact of pension items and charges connected to super storm Sandy, which offset growth in its wireless business, Verizon suffered a loss of $1.48 in the quarter.

Shares were down nearly 2%.

Property insurer Travelers recorded fourth-quarter net income of $304 million, or 78 cents a share, a sharp decline from $618 million, or $1.51 a diluted share, in the prior year due to the impact of Hurricane Sandy.

Operating income was 72 cents a share versus the average analyst estimate of 14 cents a share.

Shares were up more than 3%.

Johnson & Johnson reported fourth-quarter earnings of $1.19 a share on revenue of $17.6 billion, compared with the average analyst estimate of earnings of $1.17 a share on revenue of $17.7 billion, as worldwide consumer sales fell 2.9%. Overall, domestic sales and international sales declined amid negative currency effects.

The company announced full-year earnings guidance of $5.35 to $5.45 a share. Analysts are forecasting full-year earnings of $5.49 a share.

Shares were off more than 1%.

Google (GOOG) reports after Tuesday's closing bell and analysts expect the search giant to post fourth-quarter earnings of $10.50 a share on revenue of $12.4 billion. Shares were up fractionally.

IBM (IBM) is expected by Wall Street to report earnings of $5.25 a share in the fourth quarter on sales of $29.1 billion. Shares were down incrementally.

Chipmaker Texas Instruments (TXN) is seen earnings 34 cents a share in the fourth quarter on revenue of $2.95 billion.

Shares of Research In Motion (RIMM) surged to a 13-month high on Monday in Toronto after CEO Thorsten Heins told a German newspaper the company could sell its handset business or license its software to rivals following the launch of its new BlackBerry 10 operating system, according to reports. Shares were jumping more than 6.5% in premarket trading Tuesday.

"The main thing for now is to successfully introduce Blackberry 10. Then we'll see," said Heins in the newspaper interview.

Satellite TV provider Dish Network (DISH) is reportedly planning to shutter about 300 Blockbuster stores across the U.S., reducing its headcount by about 3,000.

Viacom (VIAB) shares have been raised to buy from neutral at Goldman Sachs, which cites strength in fundamentals and a ratings boost from fresh programming at Nickelodeon.

-- Written by Andrea Tse in New York.



>To contact the writer of this article, click here: Andrea Tse.

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