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Stocks flat ahead of payrolls report

David Russell (david.russell@optionmonster.com)

Stocks are up slightly this morning with gains across the Atlantic.

S&P 500 futures are fractionally higher while most European indexes rose by less than half a percent. Asia was mixed in the overnight session, with Shanghai falling almost a full percentage point after the People's Bank of China declined to perform liquidity operations. The move came as home prices on the mainland increased at their fastest pace in more than three years and leading indicators accelerated in September.

Investors are also waiting for last month's non-farm payrolls report at 8:30 a.m. ET. Originally scheduled for Oct. 4, the release was postponed because of the recent government shutdown. It will probably affect sentiment less than normal because of the delay.

The S&P 500 eked out a new record high yesterday and has risen in eight of the last nine sessions after bouncing at its 100-day moving average earlier in the month. While the Russell 2000 small-cap index led for most of this year's run, the Nasdaq 100 has stood out in the last week as the tech-heavy index pushes to levels last seen during the 2000 dot-com bubble.

Our researchLAB market scanner has also shown strength among European banks, solar-energy stocks, office-supply retailers, oil refiners, and precious metals have shown strength over the last week.

Corporate results are the main item on the agenda this week, with few important economic events on the calendar. Netflix.com is indicated to open higher by 9 percent after profit beat expectations and the company added 1.3 million streaming customers. VMware rose 10 percent after earnings and revenue beat. Lockheed Martin also inched higher on strong results. Texas Instruments is likely to fall after issuing weak guidance. Discover Financial and Rent-A-Center were also indicated lower after earnings missed consensus.

This morning's other big names Delta Air Lines, DuPont, Travelers, United Technologies, and Whirlpool. Amgen and Juniper Networks report in the afternoon. (Use researchLAB's dedicated earnings links to quickly review results this season.)

Commodities and foreign-exchange trading are mixed but support risk-taking. Copper and the Australian dollar are both slightly higher, a sign of confidence in the global economy. The safe-haven Japanese yen is also down across the board and continues a weakening move begun earlier in the month. Brent crude oil is up more than half a percent, while West Texas Intermediate fell half a percent--a combination of price action that tends to support refinery stocks.

Precious metals are surrendering some of their recent gains and agricultural products are lower. The euro is also posting a small loss against the U.S. dollar as the common currency pauses near a long-term resistance level from February.

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