Stock futures edged higher on Monday, Oct. 23, as equities looked to begin the week trading above previous record closes.
Dow Jones Industrial Average futures were up 0.09%, S&P 500 futures added 0.05% and Nasdaq futures increased 0.14%.
Wall Street ended last week in good spirits with all three major indexes ending at records as Congress took the first legislative steps toward tax reform. Gains pushed all three indexes to records, the Dow and S&P 500 for their fifth session in a row. The rally kicked off after Senate lawmakers voted to pass a fiscal 2018 budget resolution, the first step toward tax cut legislation.
European markets were higher after Spain's Prime Minister Mariano Rajoy outlined measures to take control of Catalonia. On Saturday, Rajoy unveiled a number of measures, including a plan to clear out the entire separatist regime in Barcelona and take control of key institutions in the media and police, in response to the region's disputed referendum on independence on Oct. 1.
The Catalonian parliament will meet on Thursday to decide on how to respond to Rajoy's measures. The Spanish senate will meet on Friday and is expected to sign off on the measures that will likely see Catalan's President Carles Puigdemont and his cabinet fired. Spain's chief prosecutor said that Puigdemont could face 30 years in jail if he declares independence.
Asian markets were mostly higher after a landslide victory for Prime Minister Shinzo Abe. The Nikkei closed up more than 1%. Abe's victory will ensure loosened monetary policy will continue and clears a hurdle for Abe's long-term goal to amend the constitution. Nikkei's gains marked its 15th straight day in the green, its longest winning streak on record.
In earnings, Halliburton Co. (HAL) - Get Report rose more than 3% in premarket trading after topping profit and sales estimates. The industrials company earned net income of $361 million, far better than $28 million in the year-ago quarter. Per-share profit of 42 cents came in 5 cents above estimates. Revenue of $5.44 billion exceeded estimates of $5.34 billion. CEO Jeff Miller said in a statement that Halliburton's international business "proved resilient in a challenging environment."
VF Corp. (VFC) - Get Report increased nearly 4% following a better-than-expected third quarter. The apparel company, which owns brands such as Wrangler and The North Face, earned an adjusted $1.23 a share over its recent quarter, above expectations of $1.12. Revenue of $3.51 billion came in ahead of $3.39 billion consensus. VF Corp. also raised its outlook for the full year -- the company anticipates adjusted earnings of $3.01, up from a previous $2.96 forecast, while revenue is expected to come in at $12.1 billion, up from a previous target of $11.85 billion.
Arconic Inc. (ARNC) - Get Report gained around 4% before the bell after topping quarterly revenue estimates and guiding for robust full-year sales growth. The aluminium producer generated revenue of $3.24 billion, higher than $3.09 billion consensus. Adjusted earnings did fall short, however. Profit of 25 cents a share missed by 2 cents. For the full year, Arconic anticipates sales of $12.6 billion to $12.8 billion, higher than a previous $12.3 billion to $12.8 billion. Consensus was for $12.5 billion in full-year sales.
In other deal news, Cisco Systems Inc. (CSCO) - Get Report agreed to acquire Broadsoft Inc. (BSFT) in a deal worth $1.9 billion. The offer of $55 per Broadsoft share prices the company at a 2% premium to its previous close. Reuters previously reported in August that Broadsoft was exploring a possible sale.
Deltic Timber Corp. (DEL) increased more than 7% before the bell after agreeing to a merger with Potlatch Corp. (PCH) - Get Report in a share-for-share deal with an enterprise value of $4 billion. Deltic shareholders will receive 1.8 Potlatch shares per one Deltic share. The deal is expected to close in the first half of next year.
Netflix Inc. (NFLX) - Get Report moved slightly higher before the bell after announcing that it would offer $1.6 billion in a debt offering to finance content production and acquisition. The streaming service has invested heavily in original content in recent years to differentiate itself from a rising number of video-on-demand competitors.
Tesla Inc. (TSLA) - Get Report , the electric carmaker, rose more than 1% on Monday after reaching an agreement to set up its own manufacturing facility in Shanghai. The deal will allow Tesla to build a wholly owned factory in Shanghai's free-trade zone, according to The Wall Street Journal. The arrangement, the first of its kind for a foreign automaker, could enable Tesla to slash production costs but it would still likely incur China's 25% import tariff.
Investors were also looking toward the first estimate of third-quarter economic growth to be released on Friday, Oct. 27. A string of severe hurricanes that swept across the south and southeastern portions of the U.S. and Puerto Rico toward the end of the quarter could put a big dent in growth. Economists surveyed by FactSet anticipate the U.S. economy to have grown 2.5% from July to September, slowing from 3.1% growth in the second quarter. This is just a preliminary number -- it will go through two revisions.
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