Before the bell 1-29-07: Futures change direction ahead of busy week

Posted Jan 29th 2007 8:01AM by Melly Alazraki
Filed under: Before the Bell, Earnings Reports, Analyst Upgrades and Downgrades, Home Depot (HD), Indices, Citigroup Inc. (C), Bank of America (BAC), Bristol-Myers Squibb (BMY), Kroger Co (KR), Countrywide Financial (CFC), Lowe's Cos (LOW), Verizon Communications (VZ), Phelps Dodge (PD), Mattel, Inc (MAT), US Airways Group (LCC), Economic Data

Stock futures were negative in early morning but have changed direction and are now indicating to a positive start for the S&P 500 and possible higher start for the Nasdaq as well as investors are jittery ahead of a very busy week. This week will be not only busy with earnings results, but with economic reports and a Federal Reserve policy meeting.

After rising in Asia overnight, oil prices eased a little this morning while the dollar gained against the yen, but was unchanged against the euro.

In corporate news, first earnings:

Mattel Inc. (NYSE:MAT) posted a 3% fourth-quarter profit growth. Net income grew to $286.4 million, or 75 cents per share, on revenue of $2.11 billion, a 14% increase over last year. Analysts surveyed by Thomson Financial expected earnings of 67 cents per share on revenue of $1.99 billion.

Schering-Plough Corp. (NYSE:SGP) reported a 75% surge in fourth-quarter profit as net income totaled $182 million, or 12 cents per share. Excluding items, the company posted profit of 17 cents per share, in line with analysts' estimates.

Phelps Dodge Corp. (NYSE:PD) is expected to report per-share income of $4.28 for the fourth quarter today while Verizon Communications NYSE:VZ) is expected to report fourth-quarter per-share income of 61 cents. Both should report before the market opens.

In deal news, Citigroup Inc. (NYSE:C) has agreed to buy British insurer Prudential's Internet bank Egg for $1.13 billion in cash.

US Airways Group Inc. (NYSE:LCC) is willing to increase its hostile takeover offer for Delta Air Lines Inc. by $1 billion, according to people familiar with the matter, the Wall Street Journal reports.

There are a few rumors of deals that could affect certain stocks today, mainly relating Bank of America Corp. (NYSE:BAC) possibly making a bid for Countrywide Financial Corp. (NYSE:CFC), while Sanofi-Aventis and Bristol-Myers Squibb Co. (NYSE:BMY) could announce a merger. BMY shares are gaining 6.8% in pre-market.

Notable analysts calls this morning include upgrades to Buy of Home Depot Co (NYSE:HD) and Lowe's Companies (NYSE:LOW) by AG Edwards while Kroger Co. (NYSE:KR) was upgraded to Buy from Sell by Banc of America. Meanwhile MGM Mirage (NYSE:MGM) was downgraded by Bear Stearns to Peer Perform from Outperform.

Tags: bac, bmy, c, cfc, hd, kr, lcc, low, mat, mgm, pd, sgp, vz