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US STOCKS-Futures edge higher as J&J, Intel earnings awaited

Published 10/13/2009, 07:38 AM
Updated 10/13/2009, 07:42 AM
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* Johnson & Johnson, Intel earnings on tap

* Analyst Whitney downgrades Goldman Sachs to neutral

NEW YORK, Oct 13 (Reuters) - U.S. stock index futures rose slightly on Tuesday as investors awaited earning reports from Johnson & Johnson and Intel Corp.

* The S&P 500 index closed out six straight days of gains Monday and hit a new closing high for the year, helped by optimism that many companies in the index would beat earnings forecasts.

* J&J, the world's largest healthcare company by market value, is set to report before the open, and Intel, the world's largest chip maker, will release its results after the closing bell.

* "Analysts have become fairly conservative after being burnt by the last selloff, so I'd be surprised to see most of the big companies not beat numbers," said Rick Meckler, president of LibertyView Capital Management in Jersey City.

* Meckler said that the weak U.S. dollar, benefiting commodity and export oriented companies, was still a factor and low interest rates were acting as a stimulus for equities.

"Its going to be very difficult for this market to wean itself of the lure of those two items and the stimulus effect you get from both," he said.

*The dollar fell about 0.5 percent against a basket of major currencies.

* S&P 500 futures rose 1.5 points and were about 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 rose 16 points, and Nasdaq futures rose 3.50 points.

* Prominent U.S. banking analyst Meredith Whitney downgraded her rating on Goldman Sachs Group to "neutral" from "buy," and the shares fell about 1.5 percent.

* CIT Group Inc is seeing little interest from bondholders in a debt exchange offer aimed at repairing its fragile balance sheet, making bankruptcy increasingly likely, sources familiar with the matter said.

* American International Group Inc struck a deal to sell its Taiwan life insurance unit for $2.15 billion, marking its largest disposal of a division since a government bailout last year saved it from collapse. AIG's shares rose 0.1 percent in premarket trade.

* Oil rose for the fourth straight session Tuesday, edging above $74 a barrel on the back of rising optimism about the pace of global economic recovery and weakness in the dollar.

* Overseas, Japan's Nikkei average edged up 0.6 percent Tuesday, buoyed by exporters, while European stocks fell 0.2 percent by midday, trimming the previous session's gains, with shares in large banks falling.

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