NEW YORK (
) -- Stock futures were barely budging Tuesday as investors digested earnings from
(KO - Get Report)
and awaited President Barack Obama's State of the Union address Tuesday night.
Obama's speech is expected to partly focus on the need for budget reform, as the sequestered spending cuts totaling about $85 billion are scheduled to take effect in just two weeks. There's "little apparent opportunity for compromise before then," according to David Joy, chief market strategist at Ameriprise.
"Should the scheduled cuts take effect, we do not think they will represent a 'game changer' for the U.S. economy, but they will act as a drag and will raise the risk that growth in 2013 will disappoint," said Russ Koesterich, global chief investment strategist at BlackRock, in a note. "As we get closer to the March 1 sequester deadline, we do expect to see higher levels of financial market volatility as investor attention returns to the country's fiscal drama."
Futures for the
Dow Jones Industrial Average
were unchanged, or 2.76 points above fair value, at 13,924. Futures for the
were also flat, or 0.26 points below fair value, at 1513. Futures for the
were down 3.25 points, or 4.69 points below fair value, at 2767.
The Congressional Budget Office estimated that if the sequester does kick in as scheduled the budget deficit will shrink this year to $845 billion, or 5.3% of gross domestic product, its smallest size since 2008. At the same time, federal debt held by the public will reach 76% of GDP by the end of this fiscal year, the largest percentage since 1950.
Matthew Senicola, a registered representative at JHS Capital Advisors, said he's taking a cautious stance on the market at this point after six straight weeks of gains.
With only a handful of big companies posting earnings this week, he thinks the stage is being set for a bit of profit-taking.
He said given that cheap stocks are starting to become more and more difficult to find, "a small pullback would actually be healthy for the exchanges."
" I am also a little unsettled at the lack of progress with the federal budget and the market could easily get swept away by headline risk once again," said Senicola. "Now may be a great time to consider trimming down some positions, buying some put options for insurance or selling some calls to take in premiums."
Most Asian markets were closed Tuesday for the Lunar New Year holiday.
The DAX in Frankfurt was rising 0.14% and the FTSE in London was gaining 0.43% on Tuesday. The Nikkei in Japan finished ahead by 1.94% amid comments from Economic Minister Akira Amari about yen-weakening measures.
Gold for April delivery was falling $2.30 at $1,646.80 an ounce at the Comex division of the New York Mercantile Exchange, while March crude oil futures were up 13 cents at $97.16 a barrel.
The benchmark 10-year Treasury was down 2/32, boosting the yield to 1.974%. The dollar was down 0.15%, according to the
U.S. dollar index
According to Yardeni Research, first-quarter earnings revisions are now coming in, with many of the fourth-quarter earnings already having been released. The report said that through last week first-quarter forecasts have fallen for all 10 sectors since Dec. 27, versus just six sectors falling over the same time period only two weeks ago.
The Yardeni note said that despite the recent weakness in earnings forecasts, energy is the only sector expected to post a year-over-year earnings decline during first quarter of 2013.
In corporate news Tuesday, Coca-Cola posted fourth-quarter earnings of 45 cents a share, topping estimates by a penny. Revenue came in light at $11.46 billion, below the average analyst estimate of $11.54 billion, as volumes fell in Europe, reflecting the ongoing macroeconomic uncertainty and weak consumer confidence across the region. Shares were down less than 1%.
Goodyear Tire & Rubber
(GT - Get Report)
shares were sliding more than 2.5% after the company reduced its full-year outlook on segment operating income to $1.4 billion-$1.5 billion from $1.6 billion.
CEO Tim Cook is speaking at the Goldman Sachs Technology and Internet Conference in San Francisco on Tuesday. Shares were trading sideways in premarket trading.
Lions Gate Entertainment
a profit in its fiscal third quarter as revenue soared
on the back of the success of the "Twilight" series finale. Shares were up 0.91%.
said Tuesday it would cut at least 3,700 jobs in a major restructuring following a series of scandals. Shares were popping more than 7%.
said Monday it initiated a review of strategic alternatives, including a possible sale of the maker of ball bearings and plumbing products.
is considering leveraged recapitalization as an alternative, as efforts to sell itself to private equity snag over price and the business outlook declines for the industrial machinery maker, according to
. Shares were falling 1.5%.
(KORS - Get Report)
shares were surging by more than 10.5% after the branded women's apparel company's quarterly results beat estimates amid a substantial increase in same-store sales and the addition of new stores.
(HCA - Get Report)
shares were falling more than 2% after the hospital operator said that certain stockholders, consisting principally of affiliates of, or funds sponsored by Bain Capital Partners and Kohlberg Kravis Roberts, plan to offer for sale in a secondary offering about 50 million common shares.
-- Written by Andrea Tse in New York.
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