Stock Futures Suggest a Softer Start


NEW YORK (TheStreet) -- U.S. stocks were set for a lower open Tuesday, as markets take a breather from the first-quarter rally and consolidate ahead of earnings season.

Futures for the Dow Jones Industrial Average were down 26 points, or 32 points below fair value, at 13163. Futures for the S&P 500were down 3 points, or about 4 points below fair value, at 1409. Futures forthe Nasdaq were down 4 points, or 7 points below fair value, at 2773.

All the major indices finished higher on Monday, the first day of the second quarter, after data showed that domestic manufacturing continued to improve last month.

Stocks posted their strongest first quarter gains since 1998 and are trading near multi-year highs. If history is a guide, April could be yet another promising month.

Since 1945, April has been the second-best month of the year for the S&P 500, which has risen an average of 1.6%, behind only December's 1.8% advance. The market has also posted gains in 70% of Aprils since World War II, according to S&P Capital IQ.

Conversely, when April goes bad, it's been known to go really bad with the S&P 500 losing more than 5% in three instances -- 1962, 1970 and 2002.

With little by way of earnings news -- the season kicks off later next week-- investors will continue to focus on economic data.

The minutes of the Federal Reserve Open Market Committeemeeting is the highlight of Tuesday's U.S. economic calendar.

Investors are having a hard time getting a read on the Fed's viewon the economy.

Chairman Ben Bernanke has sent mixed signals, acknowledging improvement in the economy, while at the same time arguing for the need for continuing an accommodative monetary policy.

Bond markets will be poring through the internal debate within the FOMC for any signs that the central bank might hike interest rates sooner than stated.

Other economic reports on the calendar include the factory ordersreport at 10 a.m. EDT. The consensus estimate, according to Briefing.com, is for an increase of 1.4% vs. a decline of 1% in January

The ICSC-Goldman same stores sales data and motor vehicles sales numbers also will be released.

Overseas, Asian markets closed on a mixed note.

Hong Kong's Hang Seng gained 1.3% while the Nikkei Averagein Japan gave up 0.6%.

Germany's DAX was losing 0.16% while London's FTSE was down 0.3% on Tuesday.

In corporate news, the Securities and Exchange Commission is examining Groupon's ( GRPN) revision of its financial results, according to a report from The Wall Street Journal.

On Monday, the online deals company revised its reported fourth-quarter results lower. Its independent auditor determined it has a "material weakness" in its internal controls. Groupon affirmed its first-quarter guidance, reiterating its revenue forecast ofbetween $510 million and $550 million.

The CFTC accused Royal Bank of Canada ( RY) of making illegal trades to reap tax benefits. The bank has denied the allegations and vowed to vigorously defend its reputation.
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May oil futures were down 75 cents to $104.48. In othercommodities, June gold futures were down 30 cents to $1679.4 an ounce.

The dollar index was trading flat. The benchmark 10-year Treasurywas up 4/32 pushing the yield down to 2.182%.

-- Written by Shanthi Bharatwaj in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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