U.S. stocks were poised for a slightly weaker open on Tuesday after quarterly results from Citigroup Inc
U.S. stocks were poised for a slightly weaker open on Tuesday after quarterly results from Citigroup Inc (NYSE:C – News) led to concern about the quality of financial sector earnings as reporting season ramps up.
Citigroup (NYSE:C – News) posted a $7.6 billion fourth-quarter loss after taking charges linked to repaying government funds, following in the footsteps of JPMorgan’s (NYSE:JPM – News) disappointing results on Friday.
Citi shed 1.5 percent to $3.37 in premarket trades.
“Based on JPMorgan — the best of breed — that didn’t quite do it for the banks, you can’t expect one of the lower tier banks to do much better,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
“Eventually people have to realize and come back to reality that government stimulus won’t last forever, and these banks will have to stand on their own with a new business model,” Saluzzi said.
Kraft Foods lost 2.8 percent to $28.75 after the company agreed to a revised cash-and-stock deal to buy Cadbury for about $19.6 billion, creating the world’s top confectioner.
The pace of corporate earnings builds this week, with IBM Corp (NYSE:IBM – News) scheduled to report after the close on Tuesday while Google Inc (NasdaqGS:GOOG – News), Goldman Sachs Group Inc (NYSE:GS – News) and American Express Co (NYSE:AXP – News) are due to post results later in the week.
S&P 500 futures fell 1.1 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 fell 6 points, and Nasdaq 100 futures added 3.75 points.
U.S. markets were closed on Monday for the Martin Luther King Jr Day holiday.
Tyco International (NYSE:TYC – News) gained 1.2 percent to $38.00 after the industrial conglomerate said it will acquire Broadview Security, which operates for Brink’s Home Security Holdings Inc (NYSE:CFL – News), for $1.9 billion in a deal that brings together two large providers of residential and commercial security in North America, the two companies said on Monday.
Brink’s shares surged 32.6 percent to $41.65 in premarket.
Swiss Re (VTX:RUKN.VX – News) agreed to transfer a U.S. life reinsurance contract to Warren Buffett’s Berkshire Hathaway (NYSE:BRK-A – News) for $1.27 billion, enabling Berkshire to pocket premiums payable under the contract while taking responsibility for up to $1.5 billion in potential claims.
Parker Hannifin Corp (NYSE:PH – News) jumped 4.2 percent to $61.00 after the maker of motion control technology reported a smaller-than-expected drop in quarterly profit and raised its fill year earnings forecast.
Goodyear Tire & Rubber Co (NYSE:GT – News) were unchanged at $15.02 after the company said on Monday it expects to record a charge of about $150 million in the first quarter because of Venezuela’s devaluation of its currency earlier this month.