--Stock futures pull back in the wake of deal to reopen government, suspend the debt ceiling
--Investor focus turns to lackluster earnings; IBM, Goldman Sachs drop in premarket
--Treasury yields and the dollar decline; gold rallies; Europe markets slip
--Jobless claims data, Philly Fed on tap
By Tomi Kilgore and Michele Maatouk
NEW YORK--With a debt default averted and the government to reopen after a 16-day shutdown, U.S. stock futures pulled
back from recent sharp gains as investors turned their attention toward lackluster earnings results from blue chip
Growing expectations that the turmoil in Washington will keep Federal Reserve from reducing stimulus by paring back on
bond purchases drove down the dollar and pushed up Treasury prices. European stocks eased.
About 90 minutes ahead of the open, Dow Jones Industrial Average futures declined 60 points, or 0.4%, to 15189.
On Wednesday, the Dow rallied 206 points, or 1.4%, after Senate leaders reached an agreement to raise the debt ceiling
and reopen the government. The House voted Thursday evening to pass the deal, which will reopen the government through
Jan. 15 and suspend the debt ceiling through Feb. 7. President Barack Obama signed the bill after midnight.
The Dow closed 1.6% above where it was when the government shutdown began Oct. 1, and just 2% below its Sept. 18
record-high close of 15676.94.
S&P 500 index futures lost two points, or 0.1%, to 1711 and Nasdaq 100 futures were unchanged at 3264. Changes in
stock futures don't always accurately predict stock moves after the opening bell.
"Generally speaking, we're going to get back to stock picking," said Dan McMahaon, director of equity trading at
Raymond James. "Now, it's all about earnings. We've got to get back to work."
International Business Machines slumped 7.4% in premarket trading after reporting third-quarter earnings that topped
analyst estimates but revenue that fell short amid a sharp decline in hardware sales.
Fellow Dow component Goldman Sachs fell 2.4% after topping earnings expectations but missing on revenue, citing a
period of slow client activity.
UnitedHealth Group dropped 2.9% after matching on earnings and falling shy on revenue, while Verizon Communications
gained 2.4% after beating on earnings on strong wireless subscriber growth.
Elsewhere, eBay slid 5.3% after third-quarter revenue missed estimates and the online auctioneer provided a
disappointing earnings outlook for the current quarter.
Despite the day's pullback on lackluster earnings, Mr. McMahon said it was difficult not to be optimistic with the
market trading near all-time highs. "Any selloff will be somewhat muted," he said. "We'll likely continue to bump along,
and trend higher" through year-end.
At 8:30 a.m. EDT, initial claims for jobless benefits in the latest week are expected to decline to 330,000 from the
previous week's original estimate of 374,000. The Philadelphia Federal Reserve's October index of manufacturing activity
is seen slipping to 15 from September's 22.3. Data on housing starts, building permits and industrial production have
been postponed until further notice due to the government shutdown.
The yield on the 10-year Treasury note fell to 2.629% from 2.669% late Wednesday. Yields move inversely to prices. The
dollar fell below Y98 against the yen while the euro pushed above $1.36, to approach eight-month highs.
"Economic data has been delayed, distorted and depressed by the shutdown and it will not be until early next year that
we can get a clear picture of the fourth quarter," said Keith Wade, chief economist at Schroders, which has $388 billion
in assets under management. "The risk of another political standoff will also weigh on Fed deliberations. As a result we
would not expect tapering to begin until March next year with the possibility it will be delayed until June," added Mr.
Meanwhile, European stock markets edged lower, failing to build on gains forged earlier this week. A lowered growth
outlook by Germany's leading economic think tanks helped offset better-than-expected retail sales data out of the U.K.
The Stoxx Europe 600 eased 0.1%.
The Stoxx Europe 600 eased 0.2%, Germany's DAX 30 index lost 0.6% and London'sFTSE 100 index slipped 0.1%.
Economic growth in Germany's is now expected to grow 0.4% this year and 1.8% next year, compared with earlier
estimates of 0.8% and 1.9%, respectively, the think tanks said. Meanwhile, U.K. retail sales for September rose 0.6% on
the month, beating expectations of a 0.3% increase.
Asian markets were mixed to mostly higher in the wake of the U.S.'s budget deal. Japan's Nikkei Stock Average rose
0.8% and Australia's S&P/ASX 200 gained 0.4%, while China's Shanghai Composite slipped 0.2%.
Front month October gold futures rose 2% to $1,307.20. "The market was waiting for a selloff post the U.S. Congress
deal which didn't happen, so some people are throwing in the towel on the short gold trade," traders on Citigroup's
bullion desk reported.
November crude oil futures lost 0.5% to $107.79 a barrel.
-Write to Tomi Kilgore at email@example.com and to Michele Maatouk at firstname.lastname@example.org
(END) Dow Jones Newswires
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