Early indications suggest that Wall Street stocks may open Monday's session lower, extending the lackluster mood from last Friday. Weighing on the risk sentiment, the results of the Greek snap election, which has given substantial inroads to the left-leaning Syriza party, which is widely expected to give the thumbs down to austerity measures that could see Greece being ejected out of the eurozone. The political risk along with reactions to earnings due ahead of the market open, any potential M&A announcements, the results of a private service sector survey, caution ahead of the week's FOMC decision and the direction of oil prices could the mood in the domestic markets. Global cues are mixed, with the Asian markets ending mixed for the day, while the European averages are trading on a lackluster manner.
At 6:10 am ET, the Dow futures are slipping 70 points, the S&P 500 futures are moving down 6.90 points and the Nasdaq 100 futures are receding 9.25 points.
U.S. stocks reversed course and advanced in the week ended January 23rd, as hopes of a benevolent stance by the European Central Bank helped sustain market movement for much of the week.
On the economic front, The year's first FOMC meeting and some consumer and housing readings are expected to dominate proceedings in Main Street in the unfolding week. With growth data in the U.S. turning more and more vibrant, traders fear that the Fed may be forced to being normalizing rates even as uncertainties cloud the global economic outlook. Against this backdrop, the week's FOMC meeting assumes a lot of important to gauge the Fed's pulse.
The most-focused on events of the week are likely to be the 2-day FOMC meeting that gets underway on Tuesday, consumer sentiment readings for January by the Conference Board and the University of Michigan and Reuters combine, advance fourth quarter GDP estimate, the Commerce Department's new home sales and durable goods orders reports for December, the National Association of Realtors' pending home sales index for December and the weekly jobless claims report.
Markit's preliminary U.S. service sector reading for January, the house price index for November based on S&P/Case-Shiller survey and the results of MNI Indicators' manufacturing survey for January are also some closely watched events of the week. The results of a couple of regional manufacturing surveys, the Labor Department's employment cost index for the fourth quarter and the results of Treasury auctions of 2-year, 5-year and 7-year notes round up the economic events of the week.
Markit is scheduled to release preliminary results of its service sector survey for January. The service sector purchasing managers' index is expected to rise to 53.8 from 53.6 in December. The Dallas Federal Reserve is scheduled to release the results of its manufacturing survey for January at 10:30 am ET. The business activity index is expected to edge down to 4 in January from 4.1 in December.
In corporate news, Healthways (HWAY) announced that its board is exploring strategic alternatives to enhance shareholder value. Axis Capital (AXS) and PartnerRe (PRE) announced an $11 billion merger agreement.
Crane (CR), J&J Snack Foods (JJSF), Microsoft (MSFT), MicroStrategy (MSTR), Packaging Corp. (PKG), Plum Creek (PCL), Rambus (RMBS), RLI Corp. (RLI), Sanmina (SANM) and Texas Instruments (TXN) are among the companies due to release their quarterly results after the close of trading.
The major Asian markets ended mixed, with the Chinese, Hong Kong, New Zealand and the Taiwanese markets ending higher, while the rest of the markets in the region closed in negative territory. The rise in risk aversion following the victory of the leftist Syriza party in Greece and the lackluster performance by Wall Street stocks last weekend rendered the mood cautious in Asia. The Australian and the Indian markets remained closed on account of the Australia Day and Republic Day, respectively.
The Nikkei 225 average ended down 43.23 points or 0.25 percent at 17,469. The yen's strength weighed down on most export stocks. Despite languishing below the unchanged line for the bulk of the session, China's Shanghai Composite Index moved decisively above the unchanged line by trading before ending up 31.42 points or 0.94 percent at 3,383. Hong Kong's Hang Seng Index ended at 24,910, up 59.45 points or 0.24 percent.
On the economic front, a report released by the Japan's Ministry of Finance showed that the trade deficit of Japan narrowed in December, with the deficit at 660.70 billion yen in December compared to the 893.5 billion yen deficit of November. Economists expected a deficit of 660.7 billion yen for the month. Exports rose year-over-year, while imports also rebounded.
The minutes of the Bank of Japan's January Monetary Policy Board meeting showed that policymakers felt that the decline in oil prices will positive influence the economy and inflation in the longer run, although dragging inflation further in the short term. At the January meeting, the central bank had left its monetary policy unchanged, although it had trimmed its near term inflation forecast.
European stocks opened lower, as the ECB optimism waned and profit taking is finally catching with the markets following seven straight sessions of gains. After some volatility in early trading, the averages are currently lower.
In corporate news, Irish airline Air Lingus Group confirmed that it has received a revised proposal to be bought by IAG for 2.50 euros per share in cash and a cash dividend of 0.05 euros per share.
On the economic front, the results of a survey by the IfO Institute showed that business climate in Germany improved in January. The business climate index rose to 106.7 in January from 105.5 in December, exceeding the consensus estimate of 106.4.
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