7:21 AM
Wall Street to open flat on earnings
Addison Ray
By Rodrigo Campos
NEW YORK | Mon Oct 18, 2010 9:22am EDT
NEW YORK (Reuters) - Stocks were set to open little changed on Monday as an earlier drop in futures was trimmed by strong earnings from Citigroup and as Apple gained ahead of the company's quarterly report.
The U.S. dollar bounced from a 10-month low against a basket of currencies, countering a recent inverse correlation with equities.
Citigroup Inc (C.N) shares rose 7 cents, or 2 percent, to $4.02 in premarket trade after it reported a third consecutive quarterly profit, slightly beating Wall Street's expectations, as losses slowed and the bank set aside less money to cover bad loans.
Investors will stay focused on financial shares on worries over the potential exposure of major banks to foreclosure losses. Concerns over the effects of a major probe into foreclosure practices dragged the sector lower last week.
"We need to hear what each individual bank says about this," said Peter Boockvar, equity strategist at Miller Tabak & Co in New York
"The group has sold off going into this so the (Citi) earnings beat is enough to bring a little bounce."
S&P 500 futures fell 1.8 points but were slightly above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures shed 15 points, while Nasdaq 100 futures added 3.5 points.
Apple Inc (AAPL.O) gained 1.3 percent to $318.92 ahead of its earnings expected after the closing bell and boosted Nasdaq futures. IBM Corp (IBM.N) is also expected to report after the close.
The U.S. dollar index .DXY rose 0.3 percent as investors trimmed bearish bets against the greenback on uncertainties over how much money the U.S. Federal Reserve will print in its latest effort to boost the economic recovery.
"Stocks can't continue to use (the Fed) as an excuse to rally," said Boockvar.
"This is a much more discriminating market, we're looking at companies that have reported, and that's what people are focusing on."
Shares of Halliburton Co (HAL.N) fell 2.3 percent to $34.99 in premarket trading after the world's second-largest oilfield services company reported results.
U.S. industrial production unexpectedly fell in September, while capacity utilization eased slightly, according to a Fed report that supported expectations of further monetary easing next month.
Later on Monday the National Association of Home Builders issues its October housing market index at 10 a.m. (1400 GMT). A reading of 14 is expected on the NAHB index, up from 13 in September.
(Editing by Padraic Cassidy)
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