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U.S. Stock Futures Posted Slim Gains; Caterpillar, Home Sales Loom

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01/27/2014 | 06:49am EDT

U.S. stock market futures posted slim gains Monday as investors debate whether last week's brutal selloff marked the start of a broad correction and Asia picked up the baton with sharp losses. Home-sales data and earnings from Caterpillar Inc. could provide some direction in premarket.

Apple Inc. will dominate after the close with its earnings report.

Futures for the Dow Jones Industrial Average are bouncing around, last up 4 points to 15,820, while those for the S&P 500 index rose 4.2 points to 1,786.30. Futures for the Nasdaq-100 index gained 4.25 points to 3,536.50.

Ahead of data, earnings from Caterpillar Inc., seen as an economic bellwether for global activity, will draw some interest before the open. The company is projected to post fourth-quarter earnings of $1.27 a share.

New-home sales for December are the only data point for investors. The final month of the year is expected to show a decline in demand, mostly due to cold weather. For the year, sales are likely to end nearly 20% higher in 2013 compared with 2012. The data is due at 10 a.m. EST.

In addition to a batch of data this week, the Federal Reserve will take center stage on Wednesday. Most observers expect the central bank to cut its bond-buying again, by around $10 million to $65 billion a month. Expectations of Fed tapering are among the reasons Wall Street suffered its worst weekly performance in more than a year last week.

Investors were unsure about how Monday's session will go. On Friday, the Dow Jones Industrial Average lost 2%, or 318 points, in its worst one-day percentage fall since June 20. For the week, a 3.5% loss marked the worst decline since Nov.25, 2011. The S&P 500 index shed 2.6% on the week, and the Nasdaq Composite Index dropped 1.7%.

Peter Cardillo, chief market economist at Rockwell Global Capital, doesn't believe this is the big correction that everyone has been expecting will happen at some point.

"January has been a disappointment so far: The latest debacle in the emerging markets is basically weighing on stocks, and it's a fear factor," said Cardillo. He said the market is probably going to work itself a bit lower and he wouldn't be surprised to see the S&P 600 test 1,775, unless markets see a strong rebound on Monday. He also doesn't see a huge rebound.

But if we see a break of 1775, Cardillo says he will rethink whether we are truly seeing the big selloff.

European stocks headed afresh down the losing path for Monday, while Asia followed up those Wall Street losses with a more-than-2% drop for the Nikkei 225 Index and a 2% loss for the Hang Seng Index. Gold continued trekking higher, while natural-gas prices hit a four-year high as parts of the U.S. looked set for another extremely cold week. The dollar continued to see some pressure against some major rivals, but emerging- market currencies such as the Turkish lira and South African rand wilted anew against the dollar.

In other corporate news, shares of Google Inc. could grab the spotlight Monday after the company said it bought artificial-intelligence company DeepMind. Samsung Electronics Co. and Google also signed a long-term cross-licensing deal on technology patents.

Write to Barbara Kollmeyer at AskNewswires@dowjones.com

Stocks mentioned in the article
ChangeLast1st jan.
CATERPILLAR INC. -1.29% 127.818 Delayed Quote.-13.52%
DJ INDUSTRIAL -0.84% 26077.21 Delayed Quote.-9.50%
HANG SENG -1.60% 25951.6 Real-time Quote.-6.44%
NASDAQ 100 0.25% 10635.987556 Delayed Quote.21.42%
NASDAQ COMP. 0.15% 10453.573616 Delayed Quote.16.28%
NIKKEI 225 -0.44% 22614.69 Real-time Quote.-3.98%
S&P 500 -0.32% 3170.83 Delayed Quote.-1.58%
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