This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Stock Futures Squeeze Out Advances as Fed Begins Meeting

NEW YORK (TheStreet) -- U.S. stock futures were eking out gains Tuesday as the Federal Reserve began a two-day policy meeting.

Futures for the S&P 500 were up 4 points, or 6.42 points above fair value, to 1,686.5 while futures for the Dow Jones Industrial Average were up 25 points, or 50.03 points above fair value, to 15,508. Futures for the Nasdaq were rising 10.25 points, or 13.55 points above fair value, to 3,075.75.

"We ... believe the taper bias will continue to be softened in light of data suggesting economic growth is slowing as well as the tightening in financial conditions that has occurred since the June FOMC meeting," Laura Rosner, a New York-based U.S. economist at BNP Paribas, said in a report.

The Fed begins its meeting Tuesday with its policy announcement scheduled for Wednesday. Tomorrow will also bring second-quarter U.S. gross domestic product figures. The week will conclude with the release the U.S. government's July non-farm payrolls report on Friday.

A number of U.S. economic reports were scheduled for Tuesday. The S&P/Case-Shiller 20-city home price index showed a lower-than-expected year-over-year gain of 12.2% in May following a 12.1% increase in April. Expectations were for a gain of 12.4% in May, according to a Thomson Reuters poll of economists.

Set for 10 a.m. release, the Conference Board's Consumer Confidence Index is forecast to come in at 81.4 for July, unchanged from June.

On the earnings front, Merck (MRK) was slipping 0.4% to $48.14 after reporting second-quarter net income that shrank to $906 million from $1.793 billion a year ago as the drug maker continues to navigate significant patent expirations, seeing sales of its allergy medication Singulair drop by 80%. Earnings per share on an adjusted squeezed past estimates by a penny at 84 cents a share.

Coach (COH) was tumbling 5.9% to $54.36 after the luxury goods company posted in-line quarterly earnings of 89 cents a share as sales in its North America market softened and Coach announced that North American Group president Mike Tucci and chief operating officer Jerry Stritzke have resigned and will depart at the end of August.

Fertilizer companies came under deep pressure Tuesday on expectations that potash prices could drop by as much as 25% to roughly $300 a ton by year end after Russian potash giant Uralkali pulled out of a marketing venture with Belarus, breaking up one of the world's largest of such partnerships that controlled nearly half of the global potash market. Potash Corp. (POT) was plunging 24.54% to $28.64 and Mosaic (MOS) was plummeting 27.89% to $38.40.

Twenty five companies were scheduled to release second-quarter earnings before Tuesday's opening bell.

So far, 274 companies have reported earnings results for the second quarter. Of those, 180 have topped analysts' estimates -- 68 have missed and 26 have met, producing a beat rate of 66%, which is above the historical average, according to Christine Short, an associate director for global markets intelligence at S&P Capital IQ.

Guidance for the third quarter has been provided by 56 companies and of those, 30 have been negative, 15 have been positive and 11 were in-line, generating a negative-to-positive ratio of 2, which is close to the 15-year average, according to Short.

Russ Koesterich, global chief investment strategist at BlackRock in New York wrote in a client note Tuesday that there's been a weaker trend in the overall economic data, which raises the prospect that corporate earnings estimates may need to be scaled back.

"So far, second-quarter earnings results have been passable, but it is important to remember that companies are beating already-lowered expectations," he said. "Analyst expectations for the third and fourth quarters are considerably higher and may need to be ratcheted down if growth disappoints. This scenario creates a potential risk for U.S. stocks."

The benchmark 10-year Treasury was rising 4/32, lowering the yield to 2.593%. The dollar was falling 0.03% to $81.64 according to the U.S. dollar index.

The FTSE 100 in London was up 0.18%, while the DAX in Germany was adding 0.24%. The Nikkei 225 in Japan finished ahead by 1.53%, while the Hong Kong Hang Seng index rose 0.48%. GfK market research group said Tuesday that its forward-looking gauge of consumer confidence increase to its highest level in nearly six years for August thanks to a robust job market and the possibility of more healthy economic growth.

September crude oil futures were slipping 64 cents to $103.91 a barrel, and August gold futures were falling $6.90 to $1,321.50 an ounce.

U.S. stocks fell to their lowest level in almost two weeks on Monday amid concern that markets have risen too high this year, and that when the Federal Reserve does decide to pullback on its stimulus measures, equities could start to tumble.

Written by Andrea Tse in New York

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

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,086.63 -26.91 -0.16%
S&P 500 1,987.01 +3.48 0.18%
NASDAQ 4,473.6970 +17.6810 0.40%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs