Stocks - U.S. Futures Mixed Ahead of Earnings; Dow Futures Down 31 Pts

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Stocks - U.S. Futures Mixed Ahead of Earnings; Dow Futures Down 31 Pts
Credit: © Reuters.

By Peter Nurse - U.S. stocks are set to start mixed Monday, with the looming prospect of fresh lockdown measures in the U.S. offsetting hopes for a fresh stimulus package out of Washington.

At 7 AM ET (1100 GMT), S&P 500 Futures traded 6 points, or 0.2%, lower, Nasdaq Futures up 7 points, or 0.1%. The Dow Futures contract fell 31 points, or 0.1%.

The second-quarter earnings season really kicks into gear this week, with almost 80 S&P 500 companies scheduled to report.The quarter is on course to see the largest drop in profits since the fourth quarter of 2008, according to data from S&P Dow Jones Indices, and investors will be looking at results from the likes of Tesla (NASDAQ: TSLA ), Intel (NASDAQ: INTC ) and Microsoft (NASDAQ: MSFT ) for guidance this week.  IBM (NYSE: IBM ) earnings are due after the closing bell Monday.

The energy sector will be one in a particularly harsh spotlight. Oil and gas services company Halliburton (NYSE: HAL ) announced a 46% drop in second-quarter revenue on the year Monday as firms cut back on drilling expenditures. Drillers cut the number of oil and natural gas rigs operating to a record for an 11th week in a row, Baker Hughes data showed on Friday. 

Elsewhere, shale company Noble Energy (NASDAQ: NBL ) agreed to be bought by Chevron (NYSE: CVX ) for just under $5 billion in an all-stock deal. The company had been worth over twice as much at the start of the year.

The epidemic isn't stopping for earnings season, though. In the U.S., more than 3.7 million people have been infected and 140,000 killed. Daily growth in cases has tripled to more than 70,000 since mid-May, and the 7-day moving average of deaths, after falling steadily from April to July, has turned higher.

U.S. lawmakers return to work this week against the background of these Covid-19 numbers, and are set to resume contentious talks on a new coronavirus-aid bill.

The Republicans want the upcoming stimulus bill to cost no more than $1 trillion while leading Democrats are seen as asking for something approaching three times as much. Analysts fear that a less generous package will mean that the already fragile economic rebound will falter.

The U.S. economic data slate is empty Monday.

Oil prices fell Monday as the growth of coronavirus cases around the globe continued to pose a threat to the recovery in fuel demand. While fuel demand has recovered from the record drop in April after countries around the world imposed strict lockdowns, usage is still below pre-pandemic levels. 

At 7:05 AM ET, U.S. crude futures traded 0.8% lower at $40.41 a barrel, while Brent fell 0.8% to $42.78.

Elsewhere, gold futures rose 0.2% to $1,813.65/oz, while EUR/USD traded at 1.1458, up 0.3%.

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