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Wall Street to rise at open after biggest drop in months

Rodrigo Campos
A trader works on the floor of the New York Stock Exchange February 3, 2014. REUTERS/Brendan McDermid

By Rodrigo Campos

NEW YORK (Reuters) - U.S. stocks were poised to rise at the open on Tuesday, underpinned by a slew of sturdy corporate results, as the market regained its footing following its largest selloff in months a day earlier.

Wall Street kicked off a global equities selloff Monday, with the S&P 500 suffering its worst drop since June, after weaker-than-expected U.S. data added to concerns over growth in China and the outlook for some emerging economies.

Equities in Japan and Seoul fell to multi-month lows overnight and Europe followed suit, weighed further by earnings disappointment.

Macroeconomic events have been a recent focus for investors in the wake of a recent rout in emerging market currencies, which triggered action by some central banks. That pressured bond and stock holdings and forced investors to exit in favor of assets perceived as relatively safe, like the yen and U.S. and German government debt.

The concerns drove the price of protection against further drops on the S&P 500 to its highest in 13 months. The CBOE Volatility Index on Monday rose 16.5 percent to close at its highest since December 28, 2012. The VIX is up 56 percent so far in 2014.

S&P 500 e-mini futures rose 11 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 70 points and Nasdaq 100 futures added 18 points.

Of the 250 companies in the S&P 500 that have recently reported earnings, 69.7 percent have beaten analysts' profit expectations, while 66.0 percent have exceeded revenue expectations, according to the latest data from Thomson Reuters.

Michael Kors Holdings Ltd reported a 77 percent jump in third-quarter profit as shoppers snapped up its handbags and accessories, sending its shares up more than 19 percent in premarket trading.

Bank shares could get a bump as U.S-traded shares of UBS and Itaú Unibanco rallied in premarket trading. Itaú, Brazil's largest private-sector lender, reported record fourth-quarter profit that beat analysts' estimates. UBS swung to a larger-than-expected fourth-quarter profit and announced higher dividends and bonuses. ADRs of both banks rose more than 6 percent in trading before the opening bell.

Shares of Yum Brands Inc rose 4.5 percent premarket after the KFC parent reaffirmed its 2014 profit outlook and said a resurgent bird flu in China had not hurt national sales in its top market.

Shares of Furiex Pharmaceuticals doubled in price in premarket trading after the drugmaker said an experimental drug met the main goal of a pair of large clinical trials by significantly alleviating diarrhea and abdominal pain associated with irritable bowel syndrome.

(Editing by Bernadette Baum)