Markets to open slightly higher as oil gains, earnings loom

April 10, 2017 08:56 AM

U.S. stocks looked set to open slightly higher on Monday as oil prices rose and investors awaited earnings from big banks to kick off the first-quarter earnings season later this week.

JPMorgan, Citigroup and Wells Fargo are scheduled to report quarterly earnings on Thursday and could throw light on the U.S. banking industry's performance after a strong finish in the fourth quarter.

Investors are keenly watching the quarterly results to justify lofty market valuations following a post-election rally, sparked off by bets that President Donald Trump would introduce pro-growth policies.

Earnings of S&P 500 companies are estimated to have risen 10.1 % in the first three months of the year, the most since the fourth-quarter of 2014. The index is currently trading at 17.4 times forward earnings estimates, above its long-term average of 15, according to Thomson Reuters I/B/E/S. 

"It looks like the start of a quiet holiday week after an underwhelming Friday, where much could have happened but didn't," said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey. 

"Unless there is a significant headline to derail what looks to be a quiet morning, I think the focus is going to be on earnings and what the companies say."

Thursday will be the last trading day of the week on the financial market ahead of the Good Friday holiday. 

Dow e-minis were up 12 points, or 0.06 %, at 8:27 a.m. ET, with 19,034 contracts changing hands.

S&P 500 e-minis were up 2.5 points, or 0.11 %, with 124,848 contracts traded.

Nasdaq 100 e-minis were up 3.5 points, or 0.06 %, on volume of 19,954 contracts.

Oil prices rose more than 1 % on Monday, with Brent crude moving above $55 per barrel following a shutdown at Libya's largest oilfield and tension over Syria after a U.S. missile strike.

Federal Reserve Chair Janet Yellen is scheduled to speak in Michigan after markets close. Investors will be looking to clues on the central bank's plans to trim its $4.5 trillion balance sheet after recent comments from Fed officials.

Shares of Straight Path Communications surged more than two-fold to $92.99 premarket after AT&T said it would buy the company for $95.63 per share in an all-stock deal

Swift Transportation rose 14.4 % to $22.90 after it announced a merger with fellow trucking company Knight Transportation. Knight's shares were up 2.6 %.

Generic drugmaker Akorn was up 11 % at $32.99 after confirming that it was in talks to be bought by German healthcare group Fresenius.

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