* Fed's Williams sees QE3 expansion next year
* Caterpillar latest bellwether to cut guidance
* Data on consumer confidence in September on tap
* Futures up: Dow 32 pts, S&P 3.9 pts, Nasdaq 11.75 pts
By Ryan Vlastelica
NEW YORK, Sept 25 U.S. stock index futures
pointed to slight gains at the open on Tuesday as investors were
optimistic heading toward the close of a strong quarter.
Gains were limited, however, after a pessimistic outlook
from Caterpillar Inc, the latest multinational company
to warn that economic weakness could hurt its results, following
The heavy machinery maker cut its 2015 profit outlook,
warning that weaker commodity prices would result in a
bigger-than-expected decline in demand. Shares of the Dow
component fell 1.8 percent to $89.22 in premarket trading.
"Caterpillar is another global-reaching firm that's speaking
negatively to the pace of the economy, and with slowdowns in
Europe and Asia this is something we should get used to," said
Art Hogan, managing director of Lazard Capital Markets in New
In economic news, U.S. single-family home prices rose for a
sixth month in a row in July, though the improvement was not as
strong as expected, according to the S&P/Case Shiller index.
Stock index futures showed little change after
Equities have rallied in recent months on expectations of
stimulus from central banks around the world, and announcements
of easing earlier this month from the Federal Reserve and
European Central Bank have kept the S&P 500 near multi-year
highs despite some weak economic data.
San Francisco Fed President John Williams said on Monday he
expected the central bank to expand its bond-buying program next
year to more aggressively combat the unemployment rate. He also
expects the program to end before the close of 2014.
"Monetary policy has been enough to offset a lot of what
we've been worried about lately," Hogan said. "It is acting as a
backstop for corporate warnings and Europe fears and keeping us
higher in a historically weak month."
S&P 500 futures rose 3.9 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 added 32
points and Nasdaq 100 futures rose 11.75 points.
The S&P 500 is on track for a 7 percent gain for the
quarter, a rally largely tied to central banks' actions to
stimulate their economies. After those gains, many market
participants are looking for new catalysts to keep pushing
Analysts said investors are probably now participating in
"window dressing," where fund managers add some of the latest
outperformers to their portfolio.
Telecommunications shares are among the quarter's top
performers. MetroPCS Communications is up almost 95
percent over the past three months, followed by Sprint Nextel
Corp, up 75 percent. Google Inc is also a strong
performer, climbing 29 percent in the quarter.
Data on September consumer confidence is on tap for 10 a.m.
(1400 GMT) and is seen rising to 63 from last month's 60.6.
Paychex Inc reported a first-quarter profit that
narrowly beat estimates, helped by higher revenue from its human
resource services business. The stock fell 3.6 percent to $33.13
before the bell.
Red Hat Inc reported a lower-than-expected adjusted
profit as costs rose, and lowered the top end of its full-year
revenue outlook on slow growth in its services business. The
stock lost 3.9 percent to $55.28 in premarket.
U.S. stocks closed flat on Monday as an index of German
business sentiment declined for a fifth consecutive month in
September, showing Europe's strongest economy was moving closer
toward recession as the euro zone's debt crisis remains
unresolved. Caterpillar's outlook further pressured sentiment
going into the close.