Futures lower as oil weighs; earnings, Fed eyed
U.S. stock index futures pointed to a softer open on Monday as a renewed decline in oil prices weighed ahead of some big-name earnings and the U.S. Federal Reserve meeting this week. Stocks managed to eke out their first positive week of the year on Friday.
Crude oil fell on continuing oversupply woes and profit-taking on Monday, reversing from early gains that followed a surge at the end of last week.
Brent (Intercontinental Exchange Europe: @LCO.1) and U.S. crude (New York Mercantile Exchange: @CL.1) declined more than 4 percent to below $31 a barrel as of 8:59 a.m. ET.
Major earnings out Monday included Halliburton (HAL), McDonald's (MCD), D.R. Horton (DHI) and Kimberly-Clark (KMB) before market open.
McDonald's earnings beat on both the top and bottom line. The fast food giant also posted better-than-expected same-restaurant sales for the quarter, helped by the launch of all-day breakfasts in the United States and recovering demand in China. The stock jumped 3 percent in pre-market trade, on track to open at a record high.
Halliburton reported earnings 7 cents above estimates on revenue slightly below forecasts, but the oilfield services giant was able to benefit from cost cuts amid falling oil prices.
DR Horton posted earnings that topped expectations, with revenue also above estimates. Sales orders were up 9 percent from a year earlier, with the value of those orders rising by 12 percent.
Kimberly-Clark missed slightly on both earnings and revenue, noting impact from unfavorable foreign currency trends. Organic sales did rise by 5 percent.
Ashland (ASH), BancorpSouth (BXS), Graco (GGG), Steel Dynamics (STLD) and Zions Bancorp (ZION) are all due after the bell.
After three extremely volatile weeks of trading, the selling has finally eased up, helped by a turnaround in oil prices and dovish comments from the European Central Bank and Bank of Japan (BOJ). Now the markets wait to hear from the Fed in the week ahead and from the BOJ at the end of the week.
While it is not expected to take any rate action, the Fed does have the opportunity to further soothe markets with its post-meeting statement Wednesday. There is no news briefing, nor will there be any updated economic or interest rate forecasts.
"Of course, ahead of the BOJ's meeting, the monetary policy focus will be on the Fed's latest Federal Open Market Committee's (FOMC) meeting, which is set to conclude on Wednesday," said Emily Nicol, economist at Daiwa Capital Markets.
"While the Fed Funds Rate is bound to remain unchanged at 0.25-0.50 percent, the post-meeting statement will be watched for the FOMC's assessment of recent global financial market turmoil, the softening in certain U.S. economic data, and concerns that inflation expectations might be becoming de-anchored," Nicol added.
With a break in the bearish action, investors will also be turning their attention to the Fed and big earnings, like Apple (AAPL) and Amazon.com (AMZN) for clues on market direction.
There are no major data releases due on Monday, with the most notable U.S. data release this week being the first estimate of fourth-quarter gross domestic product on Friday.
European stocks held mostly lower Monday as oil prices gave up gains.
Asian markets maintained a positive start to the new trading week on Monday , continuing to recover from the global rout that hammered stocks in the first few weeks of 2016.
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U.S. stocks closed higher Friday, for their first positive week in four, helped by a recovery in oil from multiyear lows and hopes of stimulus overseas.
The S&P 500 (^GSPC) closed 2 percent higher, above the psychologically key 1,900 level, with energy gaining 4.3 percent to lead all sectors higher. Oil topped $32 to settle at its highest since January 8.
—CNBC's Patti Domm and Peter Schacknow contributed to this report.
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