* Alcoa to start earnings season after the close
* European Union finance ministers summit eyed
* Spectrum Brands to buy Stanley Black & Decker unit
* Futures: Dow up 24 pts, S&P up 1.5 pts, Nasdaq off 0.5 pts
By Chuck Mikolajczak
NEW YORK, Oct 9 U.S. stocks were set for a flat
open on Tuesday with investors having little reason to buy
equities after the recent rally as they waited for the kickoff
later in the day of the U.S. quarterly earnings season.
The market was stable even after the IMF cut its forecast
for global growth.
Repeated warnings about the economy have left investors
cautious before what could be a disappointing earnings season,
after a rally that has pushed the S&P 500 up nearly 16 percent
so far in 2012, driving it to an almost five-year high.
In the past few days, however, the market has remained stuck
in a range as investors wait to see if there are any earnings
surprises and what companies expect in the fourth quarter.
"We are about earnings here for the next two or three weeks,
so I would expect to see us just chopping around in here," said
Frank Lesh, a futures analyst and broker at FuturePath Trading
LLC in Chicago. "They seem to be ratcheting down expectations
for earnings somewhat, but you are still at 1,450," he said of
the S&P 500 level.
"It either confirms your worst fears or things come in a
little better than expected. At this point you don't really
know, you just have to wait for the news."
The International Monetary Fund cut its global growth
forecast for 2012 to 3.3 percent from 3.5 percent and forecast
growth for next year at 3.6 percent. The international lender
warned that a lack of action by U.S. and European policymakers
to fix their economic problems could extend the current slump.
The IMF warnings come on the heels of a lowered forecast by
the World Bank for growth in the East Asia-Pacific region on
concerns China's slowdown could last longer than expected.
Analysts forecast third-quarter earnings of S&P 500
companies would fall 2.3 percent from the year-ago quarter,
according to Thomson Reuters data, which would be the first drop
in U.S. quarterly earnings in three years.
Earnings season will get under way later on Tuesday when Dow
component Alcoa Inc reports quarterly earnings after the
market close. Analysts expect Alcoa's third-quarter results to
show the aluminum company broke even, down from a profit of 15
cents per share a year earlier, according to Thomson Reuters
Among large multinationals that have warned about earnings,
citing weakness in Europe and China, are FedEx Corp,
Caterpillar Inc and Hewlett-Packard Co.
S&P 500 futures added 1.5 point and were roughly even
with 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 gained 24
points, and Nasdaq 100 futures dipped 0.5 point.
Investors were also eyeing a meeting of euro zone finance
ministers and a visit by German Chancellor Angela Merkel to
Greece for any signs of progress in dealing with the region's
On Monday, the euro zone finance ministers and the IMF held
a "thorough and robust" debate on Greece, but failed to make
significant progress in deciding how best to get the country
back on track with its bailout program.
According to data through Monday, 91 companies in the S&P
500 have issued negative outlooks versus 21 positive
pre-announcements, for a ratio of 4.3, the weakest showing since
the third quarter of 2001.
Edwards Lifesciences Corp cut its revenue forecast
for the third quarter, as sales of the medical device maker's
heart valve that was expected to drive results fell short of
estimates. Shares plunged 17.1 percent to $89.06 in premarket
Spectrum Brands Holdings Inc, the maker of Rayovac
batteries and other consumer products, said it will buy a unit
of Stanley Black & Decker Inc that makes door locks and
bath fixtures for $1.4 billion. Spectrum Brands shares gained
9.9 percent to $45.25 in premarket.