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TheStreet Open House

Stock Futures Upbeat Despite CAT's Weak Guidance

Stocks in this article: ^DJI^GSPC^IXICCATNFLXHALHASPWER

NEW YORK ( TheStreet) -- Stock futures were signaling an upbeat start to the week Monday, taking a cue from overseas markets as investors digested a downbeat outlook from Caterpillar (CAT) while Halliburton (HAL) and Hasbro (HAS) posted profits that beat expectations.

Futures for the S&P 500 were rising 7 points, or 4.7 points above fair value, to 1,554.5. The index slid 2.11% over the past five trading sessions. Futures for the Nasdaq were gaining 14.5 points, or 9.29 points above fair value, to 2,782.75. Futures for the Dow Jones Industrial Average were adding 45 points, or 34.49 points above fair value, to 14,515.

Caterpillar was flat at $80.50 after the world's largest maker of construction and mining equipment lowered its full-year profit outlook per share to $7 on revenue of $57 billion to $61 billion, down from previously-expected earnings per share of $7 to $9 on revenue of $60 billion to $68 billion. Caterpillar expects that demand for its mining machines will fall "significantly" amid slow growth in the world economy.

"Even as you look at the premarket action, people have pretty much come to the realization that Caterpillar is cheap with its single-digit p/e and modest yield," Chris Bertelsen, chief investment officer of Global Financial Private Capital in Sarasota, Florida, said in a phone intrview. "It's probably cyclically close to a bottom and you're probably seeing the lowest level this quarter and next quarter that you're going see for a while."

Cyclical stocks such as Caterpillar will turn higher after this quarter of stabilization as China maintains a relatively impressive growth rate, Bertelsen said.

Halliburton was popping 4% to $38.70 after the oilfield services company posted adjusted earnings of 67 cents a share, beating expectations by 10 cents, as stronger international business helped offset softness in North America and the company said it's close to resolving lawsuits related to the 2010 Macondo oil disaster. Revenue also topped estimates at $7 billion, compared with the $6.88 billion analysts surveyed by Thomson Reuters were expecting.

Toy company Hasbro posted first-quarter earnings of 5 cents a share on revenue of $663.7 million, better than earnings expectations of 4 cents a share on revenue of $638.8 million, as sales strengthened in almost all of its product categories.

About one-fifth of the S&P 500 companies have reported first-quarter earnings, with earnings-per-share growth looking to edge past 2% toward 3% or more, according to Dan Greenhaus, chief global strategist at the broker-dealer BTIG LLC in New York.

Netflix (NFLX), the video-streaming service, is expected by Wall Street to report profit of 18 cents a share in the first quarter on revenue of $1.02 billion. The report from Netflix is expected after markets close on Monday. Shares were rising nearly 3% to $168.25.

In January, Netflix forecast that it would have 28.5 million to 29.2 million U.S. streaming subscribers as of March 31, the end of the first quarter. Netflix ended 2012 with 27.1 million U.S. streaming subscribers.

ABB said Monday it would pay about $1.03 billion to buy renewable energy company Power-One (PWER) to expand its solar operations. Power-One shares were surging 55.94% to $6.30.

The National Association of Realtors releases existing-home sales numbers for March at 10 a.m. EDT. Economists in a Thomson Reuters poll predict a rise to 5.01 million annualized units in March from 4.98 million in February.

The Nikkei 225 in Japan finished up 1.89% Monday -- at its highest level in nearly five years -- led by exporters as the yen continued its descent against other major currencies and leaders at the weekend's G-20 meeting showed acceptance of Japan's aggressive monetary policies to combat a stagnant economy. The Hong Kong Hang Seng index closed up 0.14%.

European markets rose after Italian President Giorgio Napolitano begrudgingly agreed to a second term in office over the weekend and was expected to attempt to end February's deadlocked national elections. The FTSE 100 in the U.K. was higher by 0.51% and the DAX in Germany was ahead by 0.79%.

June crude oil futures were rising 69 cents to $88.96 a barrel on the New York Mercantile Exchange, while June gold futures were soaring $34.60 to $1,430.20 an ounce.

The dollar was rising 0.09% to $82.78 according to the U.S. dollar index. The benchmark 10-year Treasury was falling 7/32, boosting yield to 1.735%.

Written by Andrea Tse in New York

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

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