US pre-open: Stocks seen slightly higher as investors brace for earnings

US futures pointed to a slightly firmer open on Wall Street amid rising oil prices, as investors got their first chance to react to a mixed set of earnings from Alcoa ahead of more corporate results.

At 1120 BST, Dow Jones Industrial Average futures were up 0.3%, while Nasdaq and S&P 500 futures were 0.4% stronger.

At the same time, oil prices reversed earlier losses to trade higher amid growing hopes that Sunday’s OPEC and non-OPEC meeting in Doha will lead to a production freeze.

West Texas Intermediate was up 1% at $40.76 a barrel and Brent crude was 1.4% higher at $43.42.

“While markets are clearly preparing for a deal to be struck on Sunday, it remains to be seen whether a production freeze at near record highs will be perceived as a sufficient outcome to provide a sustained rally in crude. It seems highly likely we could see traders buy the rumour and sell the fact given the potential for a disappointment on Sunday,” said Joshua Mahony, market analyst at IG.

After the close on Monday, aluminium producer Alcoa unofficially kicked off the earnings season with a whimper rather than a bang, as its revenue fell short of expectations.

Earnings fell to $16m from $195 a year before, while revenue dropped 15% to $4.9bn versus analysts’ forecasts of around $5.2bn. Shares in the company were down 4% in pre-market trade.

“US earnings season is underway and first indications are that this could live up to its billing as one of the worst in years,” said Lee Wild of Interactive Investor.

“Profit at America's largest companies is widely-tipped to have fallen by an average of 9% during the first quarter. But aluminium producer Alcoa, the unofficial starting gun, said overnight it made less than expected at the start of 2016.”

This week will see earnings releases from heavyweights JPMorgan Chase, Citigroup and Bank of America Corp.

Hertz Global Holdings nudged lower after downgrading its guidance for 2016.

Marathon Oil edged higher in pre-market trade after announcing late on Monday that it has signed agreements to sell non-core assets for $950m.

In currencies, the dollar was 0.7% weaker versus the pound, which gained ground following a surprise increase in UK inflation. The greenback was 0.2% lower against the euro but 0.4% firmer versus the yen.

Still to come on the data front, US import prices are at 1330 BST.