By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Office Depot jumps, Motorola Solutions falls
NEW YORK (MarketWatch) -- Stock futures extended losses Tuesday,
indicating Wall Street could struggle to build on a positive
session, as investors waited on service-sector and factory-order
data.
Futures for the Dow Jones Industrial Average (DJU4) fell 61
points to 16,425, while those for the S&P 500 index (SPU4) fell
9.4 points to 1,922.90. Futures for the Nasdaq-100 index (NDU4)
dipped 16 points to 3,880.75.
The Institute for Supply Management's nonmanufacturing index,
due at 10 a.m. Eastern Time, is projected to climb to 56.5% in
July, from 56% in June. That would indicate continued growth in the
service sector, though the index's readings on hiring intentions
and employment may get more attention.
At the same time, factory orders from June will be released.
They are expected to rebound from a 0.5% drop in May to a 0.6%
gain.
Weak data out of China could be a talking point for traders on
Tuesday. The Nikkei 225 index fell to its weakest closing level in
more than a week, after the HSBC China services purchasing managers
index came in at the lowest reading in the nearly nine-year history
of the index. China is a big export market for Japan manufacturers.
The rest of Asia also finished mostly lower.
Earnings, deals in focus
Among individual companies, shares of Gannett (GCI)(GCI) jumped
6.9% in premarket after the media company said it will spin off its
publishing business, creating two separate publicly traded
companies, and confirmed it will buy full ownership of Cars.com for
$1.8 billion.
Shares of Office Depot Inc. (ODP) were 5.7% higher on a higher
outlook, while earnings news also lifted Coach Inc. (COH)(COH) 4%
and CVS Caremark (CVS) by 1.5%. See also: Office Depot mentioned in
Goldman Sachs note from July 22
Target Corp. (TGT) shares fell 3.6% in premarket trade after the
retailer lowered its outlook.
Shares of American International Group Inc.(AIG) rose nearly 2%
premarket, after the insurer easily beat Wall Street forecasts with
its results late Monday.
But shares in Motorola Solutions Inc. (MSI) fell 4% after the
networking-systems company reported a drop in second-quarter sales
and guidance for the current period came in weaker than expected.
See today's notable Movers & Shakers.
The Walt Disney Co. (DIS) will report fiscal third-quarter
results after the market closes, and analysts expect profits to
rise. Marvel Studios, owned by Disney, saw a blockbuster opening
weekend for "Guardians of the Galaxy". See earnings preview for
Disney
Bulls or bears in control?
Wall Street stocks recouped some of last week's heavy losses on
Monday, with the S&P 500 (SPX) closing up 0.7% to 1,938.99, its
first gain in three sessions. The Dow Jones Industrial Average
(DJI) finished up 0.5% to 16,569.28, snapping a four-day losing
streak.
Some strategists said this week could determine whether the
bulls or bears are in control after last week's sizable selloff,
tied to the view that a sooner-than-expected rate hike is on the
cards.
"The trading action of the rally [Monday] was similar to that of
previous rebounds during the 'buy the dip' environment," said
Michael O'Rourke, chief trading strategist of Jones Trading, in a
note to investors. The ensuing short scramble was "so aggressive
that Russian's sabre rattling" -- news that it had 160 tanks and
33,000 troops on Ukraine's border -- "didn't even cause a
blip."
O'Rourke added that important resistance for S&P 500 is at
1,960, with support at 1,930 and 1,920. (Also see: What is next for
the S&P 500, 1,800 or 2,000?
http://www.marketwatch.com/story/what-is-next-for-the-sp-500-1800-or-2000-2014-08-04.)
In other markets, European stocks took some inspiration from
Wall Street gains on Monday. September futures contracts for both
crude oil (CLU4) and gold (GCU4) were flat, while the dollar (DXY)
was holding steady.
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