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Wall Street set to open flat after three-week run

A Wall Street sign is pictured in the rain outside the New York Stock Exchange in New York June 9, 2014. REUTERS/Carlo Allegri

By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks were poised for a flat open on Monday, after the Dow and S&P 500 advanced for a third straight week to fresh record highs.

Earnings season begins to wind down this week, with 16 S&P 500 companies expected to report quarterly results, including retailers Wal-Mart and Macy's as well as network equipment maker Cisco Systems.

"We have had a nice run and last week we did see the markets largely go into neutral and take a bit of a pause," said Peter Kenny, chief market strategist at Clearpool Group in New York.

"Earnings season is coming to a close, there are no economic data releases for the next two days, we’ve gotten more or less the framing for the market."

McDonald's Corp said worldwide sales at restaurants open at least 13 months fell 0.5 percent in October, hurt by stiff competition in the United States, economic and political upheaval in Europe and the fallout from a supplier scandal in China.

According to Thomson Reuters data through Friday, of 442 companies in the S&P 500 to report earnings, 74.2 percent beat Wall Street expectations, well above the 63 percent beat rate since 1994 and 67 percent for the past four quarters. Earnings are expected to grow 9.8 percent over the year-ago period.

The Dow has risen 7.3 percent while the S&P 500 is up 7.7 percent over past three weeks, the best three-week performance for both indexes since October 2011.

S&P 500 e-mini futures were up 1.75 points and fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract, indicated a flat open. Dow Jones industrial average e-mini futures rose 17 points and Nasdaq 100 e-mini futures added 9.5 points.

Alibaba Group shares were up 2.1 percent at $116.99 in premarket trading ahead of "Singles Day" in China on Nov. 11, which has become the largest day of online sales in the world.

Gilead Sciences rose 2.5 percent to $109.10 before the opening bell after data from a midstage study showed Merck's attempt to shorten hepatitis C treatment to just four weeks by adding Gilead's huge selling Sovaldi to its own oral two-drug combination came nowhere near the desired efficacy. Merck shares were down 2.9 percent to $57.65.

Toll Brothers Inc, the largest U.S. luxury homebuilder, reported a 29 percent jump in quarterly revenue after it sold more homes at higher prices as housing demand strengthened. Its shares rose 2.4 percent to $33 in light premarket trading.

GoPro shares slumped 6.8 percent to $73.67 in premarket after the company said it filed a common stock offering of up to $800 million.

(Editing by Bernadette Baum)