US pre-open: Stocks to nudge lower as investors eye Alcoa earnings

US futures pointed to a slightly lower open on Wall Street as investors awaited the latest earnings from aluminium giant Alcoa before the opening bell and as oil prices slipped back.

At 1135 BST, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were all down 0.2%.

Jamieson Blake, retail sales manager at ADS Securities London, said: “It’s a relatively quiet day ahead in terms of economic data for US markets, although by all accounts the key release today will be Alcoa’s earnings update, nominally kicking off the quarter’s reporting season.

“As it stands, Wall Street is eyeing a slightly softer start with continued appreciation of the greenback making dollar denominated assets look generally expensive. This earnings season sits squarely on top of the closing phase of the US Presidential election, so any notable bias in the fortunes of corporates could end up tipping the balance in either direction. Alcoa is just the starting point here but it seems inevitable that this strand of news will provide another layer of volatility for markets in the coming weeks.”

Meanwhile, oil prices were weaker after racking up strong gains in the previous session when Russian President Vladimir Putin told an energy congress in Turkey that the nation was ready to join OPEC in a proposed curb on production. West Texas Intermediate was down 0.8% at $50.95 a barrel and Brent crude was off 0.9% at $52.69.

In currency markets, the dollar continued to gain ground, with the pound down 0.7% to $1.2275 as leaked Treasury documents suggested that leaving the single market could cost the UK £66bn a year in lost taxes.

In corporate news, Twitter shares rose in pre-market trade following a Reuters report on Monday that Salesforce is still mulling a bid for the company.

As far as Alcoa is concerned, RBC Capital Markets expects the company to report third-quarter earnings per share of $0.29, down from $0.45 in the second quarter but up from $0.21 in the same quarter of last year. Its estimate is below consensus EPS of $0.36.

“We expect the lower earnings as a result of lower realized sale prices of alumina and weaker results in the downstream business,” it said.

There are no major US data releases due on Tuesday.