Wall Street set to open flat, with earnings in focus

By Rodrigo Campos

NEW YORK (Reuters) - U.S. stocks were set to open little changed on Friday, holding near record highs, supported by results from companies such as Amazon, Microsoft and UPS.

The S&P 500 ended Thursday just 0.15 percent away from its record close, in a 23-percent rally so far this year supported by Federal Reserve stimulus and low interest rates.

Expectations that the Fed will continue its $85 billion a month bond-purchase program will likely provide a floor for stock prices into 2014.

"The market has focused on good news stories, be it revenue or earnings, so there will be a positive impact from Microsoft and Amazon," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

 

"The backdrop is the lack of competition to equities from fixed income and this extended period of low interest rates," he said. "Investors feel they have no alternative but to be in equities."

Meckler said there was a lack of critical view on data and even on companies with stocks at lofty valuations, including Netflix , Tesla and even Amazon.

"There is not a lot of doubt globally there is a recovery; the real question is 'has the rise in the market discounted that recovery fully?'"

S&P 500 futures fell 1 point and were slightly below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 7 points and Nasdaq 100 futures added 7 points.

United Parcel Service posted a bigger quarterly profit Friday and said it expects online sales to boost holiday volume. Its shares rose 2 percent in premarket trading.

Amazon shares gained 7.8 percent in premarket trading a day after the online retailer posted a narrower quarterly loss and grew sales by a better-than-expected 24 percent.

Microsoft Corp cruised past Wall Street estimates for quarterly profit and revenue Thursday, helped by strong sales of its Office and server software to businesses, and shares rose 6.3 percent in premarket trading.

Zynga said it expects a full-year profit after reporting better-than-expected third-quarter results due to cost-cutting and a renewed focus on mobile games and core franchises. Shares jumped 12 percent in premarket trading.

Dow component DuPont said Thursday it will spin off its titanium dioxide unit into a separately traded public company within 18 months, yielding to intense pressure from Wall Street to divest the volatile business. Shares gained 1.4 percent in premarket trading.

New orders for long-lasting U.S. manufactured goods outside of transportation equipment fell in September, possibly due to uncertainty over government spending, while a surge in aircraft orders helped boost the headline durable goods number by 3.7 percent last month, more than expected.

Data due later in the day include October consumer sentiment at 9:55 a.m. (1355 GMT), and wholesale inventories for August at 10:00 a.m. (1400 GMT).

(Editing by Bernadette Baum)