US pre-open: Futures turn south as investors await raft of corporate earnings

The Dow Jones Industrial Average is expected to open approximately down 60 points, while the S&P 500 and the Nasdaq are set to begin the session seven and 13 points lower respectively.

“The reporting season in the U.S. has got off to a poor start, and to make matters worse the strong economic data adds weight to the argument that the Fed will hike rates this year,” said IG’s market analyst David Madden.

Earnings season hots up

The earnings season shifts through the gears this week, with tobacco giant Reynolds American, telecom company Verizon Communications, Harley Davidson, Travelers Cos and United Technologies all set to report ahead of the opening bell.

After the market closes, Yahoo!, Discover Financial Services and Chipotle Mexican Grill are all scheduled to release quarterly earnings.

In company news, IBM shed 4.74% in pre-market trading after the technology giant posted a drop in third quarter revenue late on Monday.

Flash memory manufacturer SanDisk surged 8.08% ahead of the bell after Bloomberg reported the company was in advanced negotiations with Western Digital over a takeover offer it received.

Honeywell International gained 0.15% in pre-market trading and could be in focus after revealing it had reached an agreement to sign German-based laboratory research business Seelze from Sigma-Aldrich for $119.4m.

On the economic data front, investors will analyse a report on housing starts for September, which is released at 1330 BST.

Shortly afterwards, at 1400 BST, New York Federal Reserve president William Dudley and Fed governor Jerome Powell will give a speech at a regulatory conference on the bond market, while Fed chairwoman Janet Yellen will speak at the Labor Department at 1600 BST.

Elsewhere, Asian equity markets struggled for direction, as lower oil prices offset a rally in Chinese stocks, while European stocks reversed earlier gains to edge lower.

The dollar was broadly stable against the pound but declined 0.45% against the euro and gained 0.11% against the yen, while gold futures climbed 0.32% to $1,174.55.

Oil prices edged lower, with West Texas Intermediate losing 0.04% to $46.26 a barrel, while Brent shed 0.35% to $48.44 a barrel.