Stocks: Europe clouds the markets

October 25, 2011: 8:12 AM ET

NEW YORK (CNNMoney) -- U.S. stocks are set to start the trading day treading water, as investors remain cautious ahead of a key summit on Europe's debt crisis, and mull over an onslaught of earnings.

Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures all hovered slightly above the breakeven point. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Investors are awaiting a European summit on Wednesday, a day leaders have pledged will end with a comprehensive plan to solve the region's debt crisis. Many traders say financial markets have already priced in high expectations for a plan, but with only a day remaining, there's uncertainty about the situation.

"As investors, we just want it to be over," said John Burke, president of Burke Financial Strategies. "If they can come to an agreement and it doesn't have to be a black cloud hanging over our heads every day, then we can focus on earnings. The market can probably move ahead some more."

U.S. stocks ended sharply higher Monday, as investors welcomed two merger announcements and strong earnings from Caterpillar (CAT, Fortune 500).

Tuesday brings earnings reports from more than 170 companies, including Dow components 3M (MMM, Fortune 500) and DuPont (DD, Fortune 500).

Companies: Netflix (NFLX) shares tumbled 35% in premarket trading, after the company announced nightmarish third-quarter results late Monday. Netflix lost 800,000 U.S. subscribers in the quarter.

BP (BP) shares rose 4% in premarket trading, after the oil company announced its profit rose to $4.9 billion in the third quarter -- up from $1.8 billion in the year-prior quarter.

European banks Deutsche Bank AG (DB) and UBS AG (UBS) both announced stronger-than-expected earnings, sending their stocks higher in premarket trading. Deutsche Bank shares gained 2.7% and UBS shares rose 3.2%.

UBS is in the midst of cutting 3,500 jobs and warned in September that a rouge trader cost the company $2 billion in losses.

Shares of 3M fell 5.7% in premarket trading, after the company missed analysts' earnings estimates.

Meanwhile, Xerox (XRX, Fortune 500) beat forecasts on earnings, sending its shares up 3.1%.

DuPont shares rose 1.5%, after the company posted solid earnings and raised its earnings forecast for the year.

Swiss pharmaceutical company Novartis AG (NVS) announced Tuesday that it will cut 2,000 jobs over the next three to five years. Shares fell 3.2% as the announcement was coupled with a weaker-than-expected earnings report.

Junk bonds are hot, but there's still plenty of fire

Online retailer (AMZN, Fortune 500) will announce its results after the closing bell. The company is predicted to post earnings of just 26 cents a share, down nearly 50% from last year.

World markets: European stocks were mixed in midday trading. Britain's FTSE 100 (UKX) edged higher by 0.4%, the DAX (DAX) in Germany ticked up 1.5%, while France's CAC 40 (CAC40) slid 0.2%.

Asian markets ended mixed. The Shanghai Composite (SHCOMP) rose 1.7% and the Hang Seng (HSI) in Hong Kong added 1.1%, while Japan's Nikkei (N225) shed 1%.

Economy: Data on home prices across 20 major U.S. cities for August from the S&P/Case-Shiller index are on tap just before the open. Analysts surveyed by expect prices to have fallen 3.5% year-on-year, improving from a 4.1% drop in July.

Tuesday also brings the latest measure of consumer confidence from the Conference Board. Analysts expect the Consumer Confidence Index to hit 46 for October, up from 45.4 last month.

Currencies and commodities: The dollar rose against the Japanese yen but fell versus the British pound and the euro.

Oil for December delivery gained $2.91 to $94.18 a barrel.

Gold futures for December delivery added $11.10 to $1,663.40 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 2.25% from 2.23% late Monday.  To top of page

Index Last Change % Change
Dow 30,932.37 -469.64 -1.50%
Nasdaq 13,192.34 72.96 0.56%
S&P 500 3,811.15 -18.19 -0.48%
Treasuries 1.46 -0.06 -3.82%
Data as of 9:17pm ET
Company Price Change % Change
Ford Motor Co 8.29 0.05 0.61%
Advanced Micro Devic... 54.59 0.70 1.30%
Cisco Systems Inc 47.49 -2.44 -4.89%
General Electric Co 13.00 -0.16 -1.22%
Kraft Heinz Co 27.84 -2.20 -7.32%
Data as of 2:44pm ET
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15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
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