US stock index futures were little changed on Tuesday as investors aimed to head into the Independence Day holiday without making big positions in their portfolios.
Trading volume is expected to be light, making stocks more vulnerable to a selloff if factory orders data due at 10:00 a.m ET (16:00 SA time), usually not a major mover for the stock market, turn out weaker than expected. Economists in a Reuters survey expect a rise of 0.2 percent in factory orders for May compared with a 0.6 percent decline in April.
Microsoft Corp will be in focus after it admitted its purchase of aQuantive, its largest acquisition in the Internet sector, was effectively worthless and wiped out any profit for the last quarter.
The US Justice Department is probing Chesapeake Energy Corp and Encana Corp for possible collusion after a Reuters report showed that top executives of the two rivals plotted in 2010 to avoid bidding against each other in Michigan land deals, a source close to the probe said.
S&P 500 futures added 1.2 points and were in line with 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 were up 7 points, and Nasdaq 100 futures rose 2.25 points.
European stocks climbed for the third session in a row as a recent raft of weak US and European macro data has raised investors' expectation that central banks will soon take fresh policy action to kick-start their economies.
The European Central Bank is expected to cut interest rates to a record low on Thursday but may need to do more to satisfy financial markets already starting to wonder about the solidity of last week's summit measures to tackle the euro zone crisis.
Monday's US ISM manufacturing report, whose main index registered a contraction in the sector for the first time since July 2009, also boosted speculation that the Federal Reserve will announce it will embark on a third round of asset purchases, known as 'QE3', perhaps as soon as the central bank's next policy meeting from July 31 to August 1. US stocks closed slightly higher on Monday.
“Yesterday's narrow trading range in the S&P 500 indicates bullish hesitation at formidable resistance on the heels of last week's strong price action,” said Ari Wald, a technical strategist at Brown Brothers Harriman in New York.
Wald said the S&P 500 is coming off of a 7-week high, but the on-balance volume (OBV) - a cumulative count of total volume on advancing days net of total volume on declining days - has not yet moved above its June 19 high due to the light volume that has undermined the recent bounce.
“It will be important for OBV to notch a new high in the coming days if the S&P 500 is to continue to move higher. It will also be bullish if OBV holds up better than price during any pullbacks,” he said.
A US judge on Monday rejected a request by Samsung Electronics Co. to lift a ban on US sales of its Galaxy Tab 10.1, another setback for the South Korean firm in its tablet patent battle with iPad maker Apple Inc.
US investment management firm BlackRock is buying Swiss Re's European private equity and infrastructure fund of funds franchise, it said on Tuesday. - Reuters