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TheStreet Open House

Stock Futures Rise Amid More Deals Activity

NEW YORK ( TheStreet) -- Stock futures were pointing to a higher open on Wall Street Tuesday amid more deals activity, and as European markets gained on data showing improved German economic sentiment.

Investors remained nervous as the U.S. sequestration deadline loomed. There are now less than two weeks left before the next fiscal cliff of automatic spending cuts kicks in on March 1.

Futures for the Dow Jones Industrial Average were up 21 points, or 16.24 points above fair value, at 13,969. Futures for the S&P 500 were up 3.50 points, or 3.51 points above fair value, at 1520. Futures for the Nasdaq were up 8 points, or 7.03 points above fair value, at 2769.

"Washington's politicians remain far from agreement on averting 'sequestration.' That suggests risk sentiment is likely to suffer into month end," said Mansoor Mohi-uddin, head of foreign exchange strategy at UBS Macro Research.

"Looking ahead, the impact of the 2013 tax hike and the sequester add to the concern that demand will remain a headwind for investment growth this year," cautioned Jan Hatzius, chief economist at Goldman Sachs.

Major U.S. stock averages ended mixed Friday after the Dow turned positive in the final minutes of trading. Investors digested stronger-than-expected consumer sentiment and New York manufacturing data. Markets were closed Monday in the U.S. for Presidents' Day.

The U.S. economic calendar Tuesday includes the National Association of Home Builders' housing market index for February at 10 a.m. EST. Economists are expecting a read of 48, up from 47 the previous month.

Gold for April delivery was unchanged at $1,609.50 an ounce at the Comex division of the New York Mercantile Exchange, while April crude oil futures were down 9 cents at $96.32 a barrel.

The benchmark 10-year Treasury was off 1/32, pushing the yield up to 2.011%. The dollar was down 0.03%, according to the U.S. dollar index.

The FTSE in London was rising 0.58% and the DAX in Frankfurt increased 1.21% as the ZEW indicator of economic sentiment for Germany rose by 16.7 points in February to a level of 48.2 points, the third increase in a row.

About 78% of S&P 500 companies have reported fourth-quarter earnings, according to Thomson Reuters.

Of the 388 companies in the S&P 500 that have reported earnings to date for the quarter, 70% have reported earnings above analysts' expectations, Thomson Reuters reported. This is higher than the long-term average of 62% and higher than the average over the past four quarters of 65%.

The report said that 66% of companies have reported revenue above analyst expectations. This is higher than the long-term average of 62% and higher than the average over the past four quarters of 50%.

OfficeMax (OMX) and Office Depot (ODP) are in advanced talks to merge, people familiar with the matter told The Wall Street Journal. Officemax shares were surging by more than 20.5% and Office Depot shares were soaring by more than 27% in premarket trading Tuesday.

Express Scripts ( ESRX) shares were rising more than 3% after the pharmacy benefit manager booked better-than-expected fourth-quarter earnings of $1.05 a share and stronger-than-anticipated sales, getting a boost from increased generic drugs usage and its purchase last year of Medco Health Solutions.

UnitedHealth (UNH) shares were sinking 5% and Humana (HUM) was plunging by 9% as the Centers for Medicare and Medicaid Services proposed worse-than-expected 2014 Medicare Advantage rates.

Dell (DELL), the personal computer maker, is expected by Wall Street Tuesday to post fourth-quarter earnings of 39 cents a share on revenue of $14.12 billion. Shares were trading sideways.

Dell reached a deal earlier this month to go private in a $24.4 billion deal.

Herbalife (HLF), at the center of a public fight between Carl Icahn and Bill Ackman, is expected to post fourth-quarter earnings Tuesday of $1.03 a share on revenue of $1.05 billion. Shares were up 0.65%.

Medtronic (MDT) posted fiscal third-quarter profit of 93 cents a share on revenue of $4 billion, versus the average analyst expectation for profit of 91 cents a share on revenue of $4.03 billion. The company reiterated its fiscal full-year revenue outlook and earnings per share guidance. Shares were falling 0.7%.

-- Written by Andrea Tse in New York

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

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