Major indexes in for a little consolidation after recent rally. Exxon, 3M, GE likely to be active.
June 16, 2003: 7:29 AM EDT
NEW YORK (CNN/Money) - U.S. stocks headed toward a weak open Monday, in a second session of consolidation, following last week's rally that brought stocks to new multimonth highs.
Weakness in European markets and a mixed dollar weighed as well. However, the setback was likely to be short-lived. As of 7:15 a.m. ET, futures pointed to just a modestly lower open for the major indexes.
It's been a quiet few weeks in terms of corporate news, but with the second quarter of 2003 due to end in two weeks, investors are entering the period when companies begin to tell investors that earnings won't be quite up to snuff. Among the excuses that may come up this quarter is the sharp decline in the dollar against the euro.
Motorola (MOT: Research, Estimates) and Texas Instruments (TXN: Research, Estimates) are among the companies that have already said this quarter will fall short of expectations.
Stocks have risen over the last 3 months due to optimism about a second-half recovery in corporate profits and especially the economy, despite little proof of such in the numbers. Whether corporate reports that show continued weakness can deter rally-minded investors remains to be seen.
Click above for details of Friday's session.
The morning's only economic indicator is the N.Y. Empire State Index, a regional manufacturing review expected to fall to 8.8 in June from 10.6 in May.
Dow stock Exxon Mobil (XOM: Research, Estimates) could be active when trading gets underway after Deutsche Bank upgraded the firm to "hold" from "buy" within a broader note on the sector.
Another Dow stock, 3M (MMM: Research, Estimates) also looked to be active after Smith Barney upgraded it to "outperform" from "neutral."
Additionally, General Electric (GE: Research, Estimates) said it has reached a tentative four-year deal with two of its largest unions regarding wages, pensions and other employee benefits. Should the agreement gain the support of the union members, it would help GE avoid a strike and might also act as a guideline for other manufacturing companies looking to restructure labor costs.
The Dow Jones industrial average begins the week at 9,117.12 after holding on to a 54-plus point gain last week despite Friday's 0.9 percent decline. The Nasdaq composite index is at 1,626.49, as Friday's 1.6 percent loss pushed the indicator down more than a point for the week. (see chart for details)
Asian stocks ended lower Monday, while European markets retreated at midday. (Check the latest on world markets)
Treasury prices rose in early trading, sending the 10-year note yield down to 3.08 percent from 3.11 percent late Friday, among the lowest rates in decades. The dollar weakened against the yen and was little changed versus the euro.
Brent oil futures rose 21 cents to $26.60 a barrel in London. Gold rose in the early going.
Among the other stocks to watch Monday: the head of Boeing's (BA: down $0.41 to $35.34, Research, Estimates) commercial jet arm said Saturday that global airline traffic is likely to pick up this year following the sharp decline that followed the Sept. 11, 2001 attacks on the United States.
Walt Disney (DIS: Research, Estimates) also looked to be active. The media company's animated hit, "Finding Nemo," co-produced with Pixar Animation Studios, recaptured the No. 1 spot in the box office this week. It has now earned more than $192 million and could be headed for $300 million in ticket sales. Disney shares were slightly lower in European trading.
Shares of drugmaker Andrx (ADRX: Research, Estimates) looked to be weaker at the start of trade after an appeals court upheld a ruling that it was guilty of violating antitrust laws.
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