* Google, Citigroup rise after earnings
* Icahn bids for Clorox, shares jump 12 pct
* BHP Billiton to acquire Petrohawk, energy shares jump
* Futures up: Dow 38 pts, S&P 3.3 pts, Nasdaq 10.5 pts
* For up-to-the-minute market news see [STXNEWS/US]
(Updates with Citigroup earnings, NY Fed data)
By Edward Krudy
NEW YORK, July 15 Wall Street was set to rise
on Friday after strong earnings from Google and Citigroup
helped lift some of the angst about Europe's debt crisis and
and stalled U.S. budget talks that have overhung the market.
Deal activity also helped. BHP Billiton's (BLT.L) $12
billion offer to purchase Petrohawk (HK.N) lifted shares in the
energy sector, while billionaire investor Carl Icahn offered to
buy Clorox Co (CLX.N) in a $10.2 billion deal.
But the second unexpected contraction in a gauge of
manufacturing in New York State underlined the risks an
economic slowdown posed to investors.
Google Inc's (GOOG.O) earnings beat forecasts, sending its
shares up 13 percent. Citigroup Inc posted higher net income in
the second quarter, helped by falling credit losses, which
helped lift the stock more than 3 percent before the opening
"The market has been focusing on the debt problems in
broad, but we have been getting good earnings results from big
names," said Peter Cardillo, chief market economist at Avalon
Partners in New York. "If we get some resolution on the debt
ceiling, the market is going to focus more on the earnings."
S&P 500 futures SPc1 rose 2.9 points and were 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 DJc1 rose 38
points, and Nasdaq 100 futures NDc1 added 10.5 points.
BHP Billiton's bid for Petrohawk drove up shares in the
energy sector as investors speculated there could be more
consolidation. Chesapeake Energy (CHK.N) rose 4.4 percent to
$31.55, while the Select Sector Energy Select Sector SPDR
exchange traded fund rose 1 percent to $75.65.
Despite Friday's lift, Wall Street was heading for its
worst week in nearly a year as global risks keep markets
volatile and overshadow the start of U.S. corporate earnings
Europe's sovereign debt crisis, stalled budget talks in
Washington and an uncertain economic backdrop have sent Wall
Street on a roller coaster ride since the spring.
The S&P 500 is down 2.6 percent so far this week, heading
for its worst week since the middle of August, 2010. Two weeks
ago Wall Street posted its best week in two years.
A health check of European banks is expected to show later
on Friday that as many as 15 lenders need more capital to
withstand a prolonged recession, with criticism growing that
the tests do not encompass the impact of a Greek default.
Ratings agency Standard & Poor's warned there was a 1-in-2
chance it could cut the United States' triple-A rating if a
deal to raise the government debt ceiling is not reached soon.
President Barack Obama suspended U.S. budget negotiations
for the day to give congressional leaders a chance to come up
with a plan of action on how to unblock talks meant to cut
deficits and avert a debt default. [ID:nN1E76D26R]
In other economic news, U.S. consumer prices fell slightly
more than expected in June to post their biggest drop in a year
on weak gasoline costs, government data showed, pointing to a
cooling in commodity-driven inflation pressures.
(Reporting by Edward Krudy; Additional reporting by Angela
Moon; Editing by Kenneth Barry)