Stock futures were lower early Tuesday morning as oil prices remained high offsetting any recent optimism about the economy in light of Monday's surprise expansion in the service sector. Several companies are also reporting earnings today and will be in focus.U.S. stocks dropped on Monday after Microsoft withdrew its takeover bid for Yahoo and as commodity prices once again spiked. The Dow industrials lost 88 points, or 0.68%, the Nasdaq Composite fell 12 points, or 0.52%, and the S&P 500 lost 6 points, or 0.45%.
Without much economic news today, no doubt investors will have no choice but to focus on the high oil prices. After setting a record close Monday and hitting a new trading high of $120.93 a barrel Tuesday, crude retreated to $119.88, down 9 cents from Monday's close. It is interesting that just as hopes were growing the slowdown of the US economy may not be as deep and long as originally thought, crude prices surge again, concerning investors about inflation and profits once again.
Several companies are reporting financial results today including Fannie Mae (NYSE: FNM) and Qwest Communications (NYSE: Q). Disney (NYSE: DIS) and Cisco Systems (NYSE: CSCO) post results after the market close.
Also, the saga between Yahoo (NASDAQ: YHOO) and Microsoft (NASDAQ: MSFT) has not ended as Yahoo CEO Jerry Yang is said to still be open to a Microsoft takeover.
Swiss banking giant UBS AG (NYSE: UBS) announced Tuesday it would cut 5,500 jobs and reported a net loss of $10.97 billion for the first quarter.
Merck (NYSE: MRK) said Monday that it plans to cut 1,200 sales jobs, 15% of its sales workforce. The announcement comes after last week the FDA rejected Merck's experimental Cordaptive drug.
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