Oil may chill stocks

Cold snap sends crude futures sharply higher, pointing markets to lower open.
January 18, 2005: 7:13 AM EST



NEW YORK (CNN/Money) - Rising oil prices were poised to hit U.S. stocks Tuesday at the start of a shortened trading week that will include earnings reports from some of the nation's leading companies.

U.S. stock futures were pointed to a lower open Tuesday, as oil prices rose on cold weather in the Northeast. The light crude contract rose 92 cents to $49.30 a barrel in electronic trading, while Brent crude gained 96 cents to $45.99.

The rising oil prices hit major markets in Asia, and sent stocks in Europe lower in early trading. U.S. stocks closed higher in trading Friday ahead of the three-day weekend, but stocks have lost ground each of the first two weeks of trading.

Bond prices were little changed in early trading, leaving the 10-year Treasury yield at 4.22 percent, while the dollar gained ground on both the euro and yen in early trading.

The only economic report due Tuesday is the Empire State Index, the first look at the state of manufacturing in January from the New York Federal Reserve. Economists surveyed by Briefing.com forecast the index should fall to 26.5 from 29.93 in December.

In corporate news, several major banks including Citigroup (Research) and Bank of America (Research), as well as Dow component 3M (Research) are due to report results before the market opens Tuesday. After the bell will bring results from IBM (Research), Yahoo! (Research) and Motorola (Research).

Intel (Research) announced a reorganization Monday, as the leading chipmaker unveiled new businesses focused on mobile electronics, corporations and homes, and dropped a money-losing unit centered on communications.

Continental Airlines (Research) announced it had won $99 million in annual cost savings from its airport and cargo employees, part of the effort by the nation's No. 5 airline to win $500 million in annual cost savings from its unions. It is still holding talks with its larger unions, including pilots, mechanics and flight attendants.

Competitor Delta Air Lines (Research), the nation's No. 3 airline, announced that Randy Rademacher had resigned as president of its Comair feeder airline unit, after a computer glitch that stranded thousands of travelers over the Christmas weekend.

Walt Disney (Research) unit ESPN and leading video game maker Electronic Arts (Research) signed a 15-year deal that will give EA access to ESPN's broadcast, print and online content -- as well as its stable of personalities -- for all of its sports titles. The integration of the two brands will begin in 2006.

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