Stock Futures Mixed as Fed Meets, Verizon and McDonald's Tumble

Stock futures are mixed as investors stay on the sidelines ahead of the kickoff to the Federal Reserve's July meeting.
By Keris Alison Lahiff ,

Stock futures were narrowly mixed as investors stayed on the sidelines ahead of the kickoff to the Federal Reserve's July meeting. 

S&P 500 futures were down 0.06%, Dow Jones Industrial Average futures fell 0.15%, and Nasdaq futures gained 0.13%.

Members of the Federal Open Market Committee will group on Tuesday for a two-day meeting, followed by an announcement on Wednesday afternoon. A press conference won't be held afterward.

The likelihood of a move in July is low, though the Fed statement will be closely analyzed for hints as to when the central bank might adjust its monetary policy after initial liftoff last December. A rate hike in July currently has a 2.4% probability, according to CME Group Fed funds futures. A December rate hike is the most likely with a 40% chance.

"We expect the tone of the communique to be more upbeat, reflecting the better-than-expected economic data over the past six weeks as well as much more stimulative financial market conditions," Deutsche Bank analysts wrote in a note. "However, the Fed will not go as far as it did last October, when it strongly hinted at a rate hike at the ensuing meeting in December. This time, the Fed will be more careful to leave its options open, preferring to see how the data evolve between now and ... September."

Crude oil extended losses on Tuesday after settling at a three-month low a day earlier. Prices were under pressure on an expected decline in U.S. refinery activity. Morgan Stanley cut its global refinery demand forecast for crude to 625,000 barrels a day, down from 800,000.

West Texas Intermediate crude oil fell 1.3% to $42.56 a barrel on Tuesday.

Verizon (VZ) - Get Report reported a drop in profit in its recent quarter as an April-May worker strike hit its bottom line. The telecom earned 17 cents a share, sharply lower than $1.04 a year earlier. Adjusted earnings of 94 cents a share came in 2 cents above estimates. Around 36,000 workers were on strike for seven weeks earlier in the year. The stock fell 1% in premarket trading.

McDonald's (MCD) - Get Report fell more than 3% after same-store sales missed estimates in its second quarter. The world's largest fast food chain reported quarterly same-store sales growth of 3.1%, lower than an expected 3.6%. Second-quarter earnings of $1.25 a share fell 1% from a year earlier and missed consensus of $1.39. 

Caterpillar (CAT) - Get Report was under pressure after detailing more job cuts and a reduced second-half outlook as demand from the oil industry continues to wither. The machinery maker now expects to earn $3.55 a share, excluding restructuring costs, down from an already-reduced previous forecast of $3.70. "We're not expecting an upturn in important industries like mining, oil and gas and rail to happen this year," CEO Doug Oberhelman said in a statement. 

DuPont (DD) - Get Report added more than 1% in premarket trading after raising the low end of its full-year profit forecasts. The chemicals producer expects 2016 adjusted earnings between $3.15 and $3.20 a share, up from a prior range of $3.05 to $3.20. The company reported an 8.4% increase in profit in its recent second quarter thanks to lower costs in its agriculture unit. 

Eli Lilly (LLY) - Get Report moved slightly higher before the bell as sales of newly-released drugs including diabetes drug Trulicity and cancer drug Cyramza helped to fuel volume growth. Revenue rose 8.6% to $5.4 billion, higher than an expected $5.15 billion. Adjusted profit of 86 cents a share was in line with estimates. 

BP (BP) - Get Report  fell 2% after second-quarter underlying replacement cost profit of $720 million came in well below analysts' predictions of about $840 million. An improvement in oil prices failed to compensate for weaker earnings from its refining business. Oil and gas production returned to profit, though only a slight one, after a $747 million loss in the first quarter. 

United Technologiesundefined exceeded analysts' estimates on its top- and bottom-lines over the second quarter and raised the low end of its sales and profit forecast for the full year. The aerospace developer earned $1.71 a share, higher than an expected $1.68, while revenue of $14.9 billion topped forecasts by $200 million. 

Gilead Sciences (GILD) - Get Report bested profit estimates in its second quarter, while reporting in-line revenue. The biotech developer earned an adjusted $3.08 a share, 6 cents above forecasts. Sales slid 5.6% from a year earlier to $7.78 billion. Gilead also cut its full-year net product sales outlook to between $29.5 billion and $30.5 billion. 

Express Scripts (ESRX)  was slightly higher in premarket trading despite missing sales expectations in its recent quarter. The pharmacy-benefit manager generated revenue of $25.2 million, slightly lower than a year earlier and $200,000 below estimates. Adjusted earnings of $1.57 a share met consensus. 

Anheuser-Busch InBev (BUD) - Get Report   raised its offer for SABMiller (SBMRY)  after calls for a sweetened offer given the sharp decline in the pound. The pound has declined by more than 10% since the June 23 U.K. Brexit referendum. AB InBev lifted its offer by 1 pound to 45 pounds a share ($59), valuing the total deal at around 79 billion pounds ($104 billion).

Loading ...