Futures Fall Amid Mixed Messages from Europe

NEW YORK ( TheStreet) -- U.S. stock futures were paring earlier gains Monday as investors digested mixed messages from European policymakers and better-than-expected earnings from Citigroup ( C).

Futures for the Dow Jones Industrial Average were down 15 points, or 30 points below fair value, at 11,551. Futures for the S&P 500 were down 1.9 points, or 3 points below fair value, at 1217 and Nasdaq futures were shedding 9 points, or 10 points below fair value, at 2368.

The Group of 20 finance ministers meeting in Paris over the weekend pledged to support capital needs of eurozone banks, while the European Union vowed to make sure the bailout fund is used in a way that maximizes its effectiveness. However, a spokesperson for German leader Angela Merkel warned on Monday that progress would be slow.

During the talks, eurozone financial ministers outlined to other G20 officials their plan to stabilize the region, according to the Associated Press. That plan is expected to be revealed to the public at the Oct. 23 EU summit in Brussels.

European stocks turned mixed after climbing earlier. London's FTSE was gaining 0.13% while Germany's DAX was down 0.13%. Japan's Nikkei Average finished up 1.5%, and Hong Kong's Hang Seng jumped by 2%.

If Europe fails to deliver a credible plan as promised, global stocks and the euro in particular would likely face immediate pressure. The stakes are particularly high because stocks have staged a blistering rally since the start of October. As of Friday's close, the Dow was up more than 9% after bottoming out on Oct. 3. The CBOE Volatility Index, or the Vix, plunged 8% on Friday, suggesting that investors had more appetite for risk.

In addition to Europe, investors were also weighing U.S. earnings news, economic data and the announcement of the largest energy merger this year. Citigroup ( C) beat analyst estimates before Monday's open, reporting revenue of $20.83 billion after $20.73 billion a year ago. Analysts had expected revenue of $19.24 billion. Shares rose 1.6% to $28.40 in premarket trading.

A read on manufacturing activity in the New York region showed little change in October. The Empire State manufacturing index continued to contract at -8.48, less than consensus estimate for a reading of -4.0 according to ThomsonONE Analytics.

Kinder Morgan ( KMI) agreed to buy El Paso ( EP) in a cash and stock. The merger would create the largest network of natural gas pipelines in the U.S. El Paso shares were surging 28.6% to $25.20 in premarket trading Monday, while Kinder Morgan shares were falling 3.3% to $26.

In another merger, Anadarko Petroleum ( APC) agreed to pay BP ( BP)$4 billion to settle all claims from the Gulf of Mexico oil spill in April 2010. Anadarko shares were adding 3.8% to $73.25 and BP shares were gaining 3.6% to $41.30.

Oil services company Halliburton ( HAL) reported third-quarter earnings of 94 cents a share, beating the average analyst estimate of 92 cents a share. Shares were up 0.6% to $37.67.

On Monday, the euro was slipping against the greenback rising to nearly a one-month high. The dollar index, a measure of the dollar's value against a basket of currencies, was gaining 0.45%. The benchmark 10-year Treasury was last gaining 5/32, diluting the yield to 2.23%.

Gold for December delivery was gaining $3.10 to trade at $1686.10 an ounce. In other commodities, the November crude oil contract was edging up 12 cents to trade at $86.92 a barrel.

At 9:15 a.m. ET, economists expect a reading on capacity utilization to come in at 77.5%, more or less unchanged from the utilization level in the prior month. Industrial output is expected to tick up by 0.2% after remaining flat in August.

Expectations for third-quarter earnings to help lift sentiment is high given that this week is the heart of earnings season. However, corporate news is still expected to take a backseat to European headlines. Some of the notable companies to report their results are Goldman Sachs ( GS), Bank of America ( BAC) and Apple ( AAPL).

-- Written by Chao Deng in New York.