It looks like the market is going to enter earnings season on an uncharacteristically calm note.
At 9:05 a.m. EDT, the
S&P 500 futures
were up 3, fractionally above fair value and pointing toward a flattish open for the broad big-cap market. The
futures, however, were up 39 points, a modestly positive indication for large-cap tech shares.
"Compared to earlier last week, it's going to be very calm," said Bill Meehan, chief market analyst
. "We had a nice strong move in tech stocks -- and not much else -- on Friday, and I expect we'll see some follow-through."
Investors have reason for a bit of cheer: The news vacuum is about to be punctured by a string of first-quarter earnings releases. The hot and heavy stuff won't come until next week, when we move into the heart of earnings. But investors rattled by recent market action will be glad enough to finally base some decisions on even a modicum of corporate results.
Earnings will be generally strong, with energy and basic materials showing the greatest growth. Tech, meanwhile, is expected to show its characteristic strength. Analysts now estimate that earnings for
technology companies will grow 18.8% from last year, according to
First Call/Thomson Financial
. And unlike with energy, that growth isn't coming on weak year-over-year comparisons. For a full look at this week's earnings, please refer to TSC's
Observers had been
debating whether stocks had already discounted first-quarter earnings before last week's extreme
volatility happened. Now, most are hoping that earnings can play something of a stabilizing role in the very unstable technology sector, a reminder of how valuations got so high in the first place.
The outlook for stocks is getting some help from the bond market, which was extending its recent rally this morning. The 10-year note was lately up 26/32 to 104 27/32 and yielding a rather noncompetitive 5.845%.
The large European bourses were mixed to higher in afternoon trade. The Paris
was soaring 110.55, or 1.8%, to 6418.59, while Frankfurt's
was 59.54 higher to 7581.74. Across the channel, London's
was off a single point to 6568.9.
The euro was trading at $0.9598.
Most Asian markets responded optimistically to Friday's gains in U.S. technology shares, and markets in Japan, Korea and Taiwan
soared higher overnight. But Hong Kong investors remained jittery after last Tuesday's volatility, fearing that coming earnings won't be strong enough to support rich valuations. In the slowest day of trading so far this year, Hong Kong's
index fell 90.9 points to 16,850.7.
In Tokyo, investors snapped up battered high-tech stocks as well as traditional manufacturing companies, helping the
shoot up 366.25 points, or 1.8%, to 20,619.06.
The dollar rose to 106.39 yen in currency dealings, as the Nasdaq's recovery on Friday led fund managers to buy dollars. It was lately sitting at 106.535 yen.
In South Korea, meanwhile, stocks surged as investors celebrated the government's announcement of a South-North summit in June. The
closed 3.9% higher on jumps in companies likely to benefit from stronger relations between the two Koreas.
For a look at stocks in the preopen news, see Stocks to Watch, published separately.