US pre-open: Stocks seen muted ahead of Morgan Stanley but Nasdaq to outperform
US futures suggested a muted open on Wall Street on Wednesday as investors eyed earnings from banking heavyweight Morgan Stanley, although the tech-heavy Nasdaq looked set to outperform the other indices
At 1100 BST, Dow Jones Industrial Average futures were flat and S&P 500 futures were up 0.1%, while Nasdaq futures were 0.3% higher.
Chris Beauchamp, chief market analyst at IG, said: "Earnings season so far has avoided any nasty surprises, and Morgan Stanley becomes the latest big financial institution to step up. Goldman’s slump in trading revenues certainly worried markets, especially since there seems no let-up in the low volatility that has prevailed all year.
"Meanwhile there seems no stopping the tech rally, fired up as it was by Netflix. Valuation worries could be easily laid to rest if the sector keeps up the positive news flow."
Meanwhile, oil prices were a touch firmer ahead of the Energy Information Administration's crude oil stocks change data at 1530 BST. West Texas Intermediate and Brent crude were up 0.3% to $46.53 and $48.98 a barrel, respectively. Market participants are expecting a decline of 3.5m barrels compared to last week's drop of 7.56m barrels.
On the corporate front, Morgan Stanley was due to report earnings before the opening bell, while IBM and United Continental could be active following their earnings late on Tuesday.
Elsewhere, McCormick was likely to be in focus after it agreed to buy London-listed Reckitt Benckiser's food division for $4.2bn.
Discovery Communications and Scripps Networks Interactive were set to gain at the open following a Wall Street Journal report that the companies might merge.
On the macroeconomic calendar, housing starts and building permits are due at 1330 BST. David Madden at CMC Markets said: "The US will announce the housing starts number for June and the consensus is for 1.15m on a month-on-month basis, and that compares with 1.09m in May. At the same time, the US will reveal the building permits for June and the market is expecting 1.2m and that would be an increase on May’s 1.16m."