* Apple to unveil smaller tablet
* Spanish yields rise after Moody’s downgrade of regions
* United Tech, DuPont post earnings
* Futures down: Dow 112 pts, S&P; 16.1 pts, Nasdaq 25 pts
By Chuck Mikolajczak
NEW YORK, Oct 23 (Reuters) – U.S. stock index futures fell
on Tuesday on concerns the slow global economy will continue to
dent corporate revenues, with a trio of Dow components appearing
to confirm investor worries.
United Technologies Corp reported a 3.3 percent
decline in third-quarter earnings and cut its sales forecast for
the year, citing weak demand from airlines and an uncertain
economy.
Fellow Dow component DuPont reported a
lower-than-expected quarterly profit on Tuesday and announced
1,500 job cuts as part of a cost savings program designed to
offset falling sales around the world. Its shares dropped 5.4
percent to $47.10 in premarket trade.
3M Co fell 2.7 percent to $90 in premarket trade
after the diversified U.S. manufacturer reported a 6.7 percent
rise in third-quarter profit, but the company cut its profit
forecast for the full year as acquisition costs and a
strengthening dollar hurt margins.
“It was ever so modest and ever so subtle but there was a
shift to the markets really starting to trade on U.S. economic
and U.S. company fundamentals and the market didn’t seem to care
much about what central banks were doing or what was going on in
Europe,” said Keith Bliss, senior vice-president at Cuttone & Co
in New York.
“Then all of a sudden – wham – we get weaker earnings this
quarter and it refocuses everybody’s attention on the global
economy.”
Adding to the global economic concerns was a fall in Spanish
bond prices after Moody’s downgraded five of the country’s
regions including economically important but deeply indebted
Catalonia.
S&P; 500 futures fell 16.1 points and were well below
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 dropped
112 points, and Nasdaq 100 futures declined 25 points.
According to Thomson Reuters data, 33 S&P; 500 companies are
scheduled to post earnings on Tuesday. Of the 123 S&P; 500
companies that have reported earnings through Monday morning,
60.2 percent have topped analysts’ expectations, shy of the 62
percent average since 1994 and below the 67 percent average over
the past four quarters.
Earnings are expected to fall 2.4 percent in the third
quarter from a year ago. Even more disconcerting to investors,
top-line expectations have been more discouraging, with 61
percent of companies having missed revenue expectations.
Apple Inc shed 0.6 percent to $630.01 in premarket
trade. The company is expected to make its biggest product move
on Tuesday since the iPad’s debut two years ago, launching a
smaller, cheaper tablet into a market staked out by Amazon.com
Inc and Google Inc.
Whirlpool Corp advanced 2 percent to $88 after
reporting a higher-than-expected quarterly profit, helped by
price increases and tight cost controls, and the world’s largest
appliance maker raised its earnings outlook for the year.
RadioShack Corp tumbled 15.5 percent to $2.02 in
premarket after the consumer electronics chain reported a much
wider-than-expected quarterly loss, hurt by weak margins in its
smartphone business.
The U.S. Federal Reserve’s policy committee is also set to
begin the first day of a two-day meeting on interest rate policy
on Tuesday. The Federal Open Market Committee is likely to hold
off from taking fresh steps at the meeting, opting to review the
impact of the significant action it took last month and keep a
low profile in its last gathering before the Nov. 6 general
election.
European stocks fell broadly as third quarter results
presented a mixed picture, hitting a one-week low that analysts
said might encourage some investors back into the market.
Asian shares were lackluster with the corporate reporting
season getting underway in the region, as investors stayed
cautious after global shares faltered overnight on weak earning
reports and outlooks.
