US STOCKS-Futures dip after two-day climb; ISM services data due

Tue Nov 5, 2013 8:16am EST

* ISM Services data due

* GT Advanced jumps on deal with Apple

* Futures off: Dow 47 pts, S&P 4.5 pts, Nasdaq 9.25 pts

By Chuck Mikolajczak

NEW YORK, Nov 5 (Reuters) - U.S. stock index futures dipped on Tuesday ahead of data on the services sector, putting the S&P 500 on pace to halt a two-day streak of gains.

The Institute for Supply Management will release its October non-manufacturing index at 10:00 a.m. ET (1500 GMT). Economists in a Reuters survey forecast a reading of 54.0 versus 54.4 in September.

Data will be closely watched this week to gauge the health of the economy; these include readings on gross domestic product and payrolls that were delayed by a government shutdown in October.

The Federal Reserve has indicated it will not begin to pare its bond-buying program of $85 billion in long-term assets per month until the economy shows signs of improvement, a mantra supported by three central bankers on Monday.

The S&P 500 is up 24 percent for the year and the Dow is up 19.3 percent, putting both indexes on track for their best yearly performances since 2003, largely driven by the stimulus measures of the Fed.

"In part what has allowed this to be such a successful year for stocks has been the Fed's commitment to make other alternatives unappealing," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

"The question is how you extract yourself from it and when they do extract themselves from it will they have built a solid enough base of equity investors or will it just come tumbling back down."

S&P 500 futures fell 4.5 points and were below 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 lost 47 points and Nasdaq 100 futures shed 9.25 points.

GT Advanced Technologies jumped 21.1 percent to $10.15 in premarket trading after the company said Apple Inc will open a manufacturing facility in Arizona in partnership with the mineral crystal specialist to make sapphire materials for Apple's electronic devices.

CVS Caremark Corp gained 2.5 percent to $63.55 in premarket trade after the drugstore operator and pharmacy benefits manager posted a higher-than-expected quarterly profit and raised its forecast for the year.

Leapfrog Enterprises Inc slid 10 percent to $7.80 before the opening bell after the toy company cut its full-year sales forecast.

Other S&P 500 companies expected to post earnings include Fossil Inc and C.H. Robinson Worldwide Inc.

With 75 percent of S&P 500 companies having reported results through Monday morning, 69 percent have topped Wall Street's expectations, above the long-term average of 63 percent. Just 53 percent have topped revenue forecasts, below the 61 percent average since 2002, Thomson Reuters data showed.

European shares set new five-year highs before dipping in the wake of mixed blue-chip results, with uncertainty in the run-up to an ECB policy meeting also keeping investor enthusiasm in check.

Asian shares sagged after hawkish comments from China's premier ahead of a key Communist Party meeting, though expectations that the U.S. Federal Reserve will maintain its stimulus for a while limited losses.

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