Stocks Bide Time After Rally
Stocks hovered Monday as investors waited to see if strong sales guidance from
Wal-Mart
(WMT) - Get Walmart Inc. Report
and assorted merger developments will be enough to extend a two-session rally.
Index futures recently showed the
S&P 500
trading half a point below fair value, while the Nasdaq 100 was set for a 1-point gain. The 10-year Treasury 5/32 in price to yield 4.53%, while the dollar rose against the yen and euro.
Stocks rose on Thursday and Friday as corporate earnings impressed and a weak report on fourth-quarter economic growth encouraged interest-rate doves. Trading this week will occur in the shadow of the
Federal Reserve's
meeting on Tuesday -- Alan Greenspan's last.
The Fed is widely expected to raise interest rates by a quarter-point for the 14th straight time, to 4.5%. All eyes will be on the accompanying policy statement for clues about how many more -- if any -- rate hikes are likely in meetings to come. Fed funds futures put odds for a quarter-point March hike at about 50-50.
For all of last week, the
Dow Jones Industrial Average
rose 2.3%, the S&P 500 rose 1.7% and the
Nasdaq Composite
rose 2.5%.
TheStreet Recommends
Oil, which gained $1.50 a barrel on Friday as concerns again rose about Iran's nuclear ambitions, was trading down 30 cents to $67.47 a barrel early Monday. Warm weather in the Northeast remained a key restraint on the contract.
Overseas markets were mixed, with London's FTSE 100 recently unchanged at 5785 and Germany's Xetra DAX rose 0.1% to 5651. In Asia, Japan's Nikkei rose 0.6% overnight to 16,551, while Hong Kong's markets were closed for a holiday.
In corporate news, Wal-Mart said it expects to post same-store sales growth of 4.7% in January, toward the high end of its 3% to 5% range, reflecting strong sales of food and groceries. Wal-Mart had comps growth of 2.2% in December.
To view David Peltier's video take on today's premarket action, click here
.
Schering-Plough
( SGP) swung to a fourth-quarter profit on a 6% rise in sales. At $104 million, or 7 cents a share, the profit was a penny short of estimates.
Other companies expected to report earnings Monday are
ExxonMobil
(XOM) - Get Exxon Mobil Corporation Report
,
Kraft
( KFT),
Kodak
( EK) and
Zimmer
(ZMH)
.
In mergers news, European steelmaker Arcelor rejected the $23 billion hostile takeover offer made last week by Dutch
Mittal Steel
(MT) - Get ArcelorMittal SA Report
. Mittal is reportedly trying to round up political support for its bid, which would create the world's biggest steel company.
Serono
( SRA), meanwhile, has reportedly resumed discussions toward selling itself to
GlaxoSmithKline
(GSK) - Get GlaxoSmithKline Plc Report
. Serono's original asking price of $15 billion is said to have been reduced.
