Stocks are set for a flat start today as investors brace for an onslaught of earnings reports that could offer more clues on how corporate profits are faring against the lackluster economic backdrop.
"It's going to be a slow start," said Mr Larry Wachtel, a market analyst at Prudential Securities. "We have a second week of a deluge of earnings, and that's going to be the primary factor."
Investors straggled back from a three-day Easter holiday weekend to the most hectic week of the first-quarter earnings season. One-third of the Standard & Poor's 500 companies will post earnings this week, including phone companies AT&T Corp. and SBC Communications Inc., film provider Eastman Kodak Co. and jet maker Boeing Co.
Companies on average have topped Wall Street's expectations so far. But market watchers warn that some companies are meeting analysts' targets mainly through drastic cost cutting, and they say they are still waiting for signs of a solid recovery.
Companies are proving hesitant to offer concrete outlooks for coming quarters, still struggling to gauge demand in an economy just beginning to emerge from the shadow of war.
Equity futures pointed to a tepid start today after the market was shut on Friday. Futures for the Standard & Poor's 500 index edged up 1.80 points to 892.90. Nasdaq 100 futures gained 1 point to 1,084, while Dow Jones industrial futures rose 6 points to 8,316.
European markets, which were also closed on Friday, remained shut on Monday for Easter. Japanese stocks ended up for a second session on Monday, but trade was thin ahead of a glut of earnings reports.
The quarterly reports were already starting to flood Wall Street early on Monday.
Merck & Co Inc., a Dow component, today before the open said its first-quarter profit rose on stronger sales of drugs for asthma, hypertension and arthritis, and easy comparisons from a poor performance in the year-ago quarter. Shares closed at $55.89 on Thursday.
Industrial conglomerate 3M Co., another Dow member, said today its quarterly earnings rose, helped by increased productivity, cost controls and the weaker U.S. dollar. Shares ended at $129.98.