* JPMorgan, Wells Fargo post earnings
* Retail sales increase over prior month
* GameStop tumbles after outlook
* Futures up: Dow 29 pts, S&P 4.4 pts, Nasdaq 9.5 pts
By Chuck Mikolajczak
NEW YORK, Jan 14 U.S. stocks were set for a
bounce on Tuesday, a day after the S&P 500 suffered its biggest
drop in two months, after solid retail sales data and as
investors digested earnings from JPMorgan and Wells Fargo.
Futures received a boost after data showed retail sales
excluding automobiles, gasoline, building materials and food
services, increased 0.7 percent last month after a 0.2 percent
rise in November.
"It's conducive to the growth story that is becoming
increasing popular," said Brad McMillan, chief investment
officer for Commonwealth Financial in Waltham, Massachusetts.
"From an economic perspective, the real economy continues to
gain traction, but from a market perspective the stronger the
economy looks the more we need to look and see whether in fact
the Fed might be pulling back sooner than people think."
The first of the large banks to post quarterly earnings
yielded mixed results. JPMorgan Chase & Co edged up 0.7
percent to $58.10 in choppy premarket trading after posting
quarterly earnings. Wells Fargo fell 0.5 percent
to $45.34 after results.
As the Federal Reserve begins winding down its stimulus,
which was largely responsible for the 29.6 percent climb in the
S&P 500 last year, investors may be forced to become more
selective about stock valuations. The forward price-to-earnings
ratio for the index is the highest in nearly seven years.
The benchmark S&P index fell 1.3 percent on Monday,
its worst decline Nov. 7, as investors exercised caution amid
mounting negative corporate outlooks.
Almost 10 of every 11 earnings pre-announcements for the
current earnings season from S&P 500 companies have lowered
estimates, according to Thomson Reuters data, which would be the
lowest on record if it continues.
Later in the week, Bank of America Corp, Citigroup
Inc, Goldman Sachs and Morgan Stanley are
among the financial companies scheduled to post results.
S&P 500 futures rose 4.4 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 gained 29
points and Nasdaq 100 futures added 9.5 points.
Stratasys Ltd dropped 4.3 percent to $124.42 before
the opening bell after the 3D printer maker, estimated full-year
adjusted profit way below Wall Street estimates, as it warned
expenses would rise significantly in 2014.
GameStop Corp tumbled 13.5 percent to $39.20 in
premarket trade after the video game retailer forecast
fourth-quarter profit below analysts' estimates.
But Intuitive Surgical advanced 11.7 percent to
$439 before the opening bell after the surgical equipment maker
gave its fourth-quarter and full-year 2013 outlook.
Merger activity continues to be lively. Google Inc
gained 1.2 percent to $1,136 in premarket trade after the
world's largest online search engine announced late Monday a
$3.2 billion deal to buy smart thermostat and smoke alarm maker
Nest Labs Inc.
Charter Communications Inc on Monday formally
offered to acquire larger rival Time Warner Cable for
$37.3 billion, sparking what is likely to be a contentious
battle to control the No. 2 U.S. cable operator. Time Warner
gained 2 percent to $134.99 before the opening bell.