* Suntory Holdings to acquire Beam for $83.50 per share
* Lululemon, Sodastream, Express fall after outlooks
* Futures off: Dow 24 pts, S&P 5 pts, Nasdaq 7.5 pts
By Chuck Mikolajczak
NEW YORK, Jan 13 U.S. stocks were poised for a
modestly lower open Monday, as investors braced for a quarterly
earnings season that picks up steam this week and which has
raised some red flags about valuations.
Investor concern may be increasing as stocks have become
expensive, with the S&P above the mean forward price to earnings
ratio and at its highest level in nearly seven years. The
benchmark S&P 500 surged about 30 percent in 2013.
According to Thomson Reuters data, fourth-quarter earnings
are expected to grow 7.3 percent over the year-ago period.
However, the 9.8 ratio of negative guidance to positive outlooks
is currently the largest on record.
"It may be that people are speculating that is it is not
going to be a very good season at this point," said Peter
Jankovskis, co-chief investment officer at OakBrook Investments
LLC in Lisle, Illinois.
"It's certainly been the last three earnings seasons people
have been questioning how much more earnings improvement can we
get without revenue improvement and it may be that is finally
catching up with companies."
Earnings are expected from 29 companies in the S&P 500 this
week, including banks such as Morgan Stanley, Citigroup
Inc, Goldman Sachs and JPMorgan Chase & Co.
Results are also due from companies including First Horizon
National Corp, M&T Bank Corp, People's United
Financial Inc and Charles Schwab Corp.
S&P 500 futures fell 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 24
points and Nasdaq 100 futures declines 7.5 points.
Equities have started 2014 on a lackluster note, dipping 0.3
percent through the first seven trading sessions as market
participants try to gauge the pace of the winding down of
market-friendly economic stimulus by the Federal Reserve.
Beam Inc jumped 25.5 percent to $84.05 in premarket
trading after the company agreed to be acquired by Suntory
Holdings Limited for $16 billion, including debt, making the
Japanese company the world's third-largest maker of distilled
A string of companies tumbled after forecasting earnings.
Lululemon Athletica Inc tumbled 12.7 percent to
$52.02 before the opening bell after the yogawear retailer cut
its forecast for the fourth-quarter due to weak sales in
Sodastream International slumped 15.6 percent to
$42.09 in premarket after the home beverage system maker after
its 2013 outlook.
Apparel retailer Express Inc lost 2.2 percent to
$18.60 before the opening bell after the company lowered its
But Wendy's outlook was a bright spot, sending
shares up 5.6 percent to $8.91 after the fast-food restaurant
chain estimated adjusted quarterly earnings above analysts'
expectations, as expenses fell due to franchising many
British engineering firm Amec said it had
provisionally agreed to buy Foster Wheeler in a cash
and share deal that values the Swiss-based engineer at 1.9
billion pounds ($3.13 billion). Foster Wheeler shares added 3.2
percent to $32.48 in premarket.