Stock Futures Dip Ahead of Earnings Season Kickoff

Andrea Tse

NEW YORK (TheStreet) -- Stock futures were lower Monday as investors awaited the start of earnings season, excitement over the "fiscal cliff" deal faded and as the next leg of the battle over the country's financial future is about to begin.

Futures for the Dow Jones Industrial Average were falling 18 points, or 38.21 points below fair value, at 13,328. Futures for the S&P 500 were down 2 points, or 5.12 points below fair value, at 1455. Futures for the Nasdaq were down 4.75 points, or 10.74 points below fair value, at 2708.

"With the beginning of earnings season this week, investors will be looking closely at company commentary in light of the recent fiscal cliff crisis and the upcoming debt ceiling fight," said Mike Simmons, managing director and partner at HighTower's Simmons Wilkes Investment Advisors. "We believe the debt ceiling debate will be one of the major determinants of market performance in coming weeks."

Major U.S. stock averages ticked higher Friday after upbeat December jobs and services-sector growth reports.

No major U.S. economic data releases were expected on Monday.

The U.S. macro calendar will be relatively light this week. However, Federal Reserve officials are expected to make a number of speeches. Bank of America economists expect the doves to reiterate a need for additional accommodation amid a subpar recovery. The Bank of America economists advise fading the comments from the most hawkish members.

Earnings season begins with Alcoa's (:AA) fourth-quarter earnings report on Tuesday. The markets will be very interested in what companies have to say with regards to the recent fiscal cliff worries and the debt ceiling battle.

Gold for February delivery was rising Monday by $6.30 at $1,655.20 an ounce at the Comex division of the New York Mercantile Exchange, while February crude oil contracts were off 31 cents at $92.78 a barrel.

The benchmark 10-year Treasury was down 2/32, raising the yield to 1.907%. The dollar was up 0.08%, according to the U.S. dollar index.

The FTSE 100 in London was slipping 0.40%, while the DAX in Germany was down by 0.54%. Hong Kong's Hang Seng finished down 0.01% and the Nikkei Average in Japan closed off 0.83%.

In corporate news, Bank of America(:BAC) shares were tacking on more than 2% in premarket trading after the bank announced that it has reached a $10 billion settlement with Fannie Mae to resolve agency mortgage repurchase claims on loans originated and sold directly to Fannie Mae through Dec. 31, 2008.

Nationstar Mortgage(:NSM) shares were surging by more than 18% after the company announced it is buying about $215 billion in mortgage servicing assets from Bank of America.

Chipmaker Nvidia (:NVDA) unveiled a handheld game console on Sunday at the Consumer Electronics Show in Las Vegas.

Nvidia didn't disclose pricing details or a release date for the "Project Shield" device, which plays Android games.

Shares were up more than 1%.

Paul Jacobs, CEO of wireless chipmaker Qualcomm(:QCOM), delivers the keynote address at the 2013 CES convention on Monday night.

Qualcomm also is expected to unveil new products for its line of modems and application processors used in smartphones and tablets.

Shares were unchanged.

Zep (: ZEP ), the cleaning company, posted first-quarter profit of 20 cents a share on revenue of $158 million, beating the average analyst estimate of 18 cents a share on sales of $156.8 million, amid strong sales-growth gains driven primarily by automotive aftermarket and home improvement retail outlets.

Steel company Commercial Metals (: CMC ) reported adjusted quarterly earnings of 15 cents a share on sales of $1.8 billion, versus the average analyst estimate of earnings of 17 cents a share on revenue of $1.9 billion. The company's Americas Recycling segment recorded a lower adjusted operating profit compared to the prior year's first quarter as lower demand negatively affected ferrous and nonferrous pricing and volumes.

-- Written by Andrea Tse in New York.

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