U.S. stocks were set to open slightly higher on Tuesday as some strong earnings could prompt investors to return to beaten-down stocks even as they worry about the profit outlook for the second half. Higher profits from telephone company Verizon Communications Inc. and defense contractor Lockheed Martin Corp. could give a boost to the market. Stocks have been under pressure in recent weeks on fears the solid improvement in earnings seen over the past year will run out of steam as interest rates rise and economic growth slows. But after months of losses, investors are debating if stocks have become cheap relative to future earnings prospects and whether to bet on a rally any time soon. The focus is still on earnings but key economic reports coming later in the week will shed more light on the state of the economy, including data on second-quarter GDP on Friday.
"After six weeks of continuous declines, the market is bouncing off its yearly lows," said John Person, head financial analyst with Infinity Brokerage Services. "We are still looking ahead for earnings this week. We have some economic numbers to look forward which may give us direction on the strength of the economy. S&P 500 futures for the September contract rose 3.6 points to 1086.5, or 3.1 points above fair value, indicating the index could open 0.3 percent higher, accounting for dividends, interest rates and time to expiration on the contract. Dow Jones industrial index futures rose 29 points, while Nasdaq 100 futures gained 6 points. Crude oil, a basic ingredient to most manufacturing and transport, has closed above $40 a barrel for nine straight days in New York. U.S. light rose 13 cents to $41.57 in electronic trading in New York, leading investors to wonder if it will close above the $40 level for a 10th day. On the economic front, Consumer confidence is expected little changed at for July when the data is released by the Conference Board at 1000 EDT (1400 GMT). The Commerce Department also releases new home sales data for June at 10 EDT (1400 GMT). Economists in a survey forecast a median total of 1,278,000 annualized units in June compared with 1,369,000 in May. Lockheed, the No. 1 defense contractor, could take the spotlight after it posted second-quarter earnings that rose 22 percent amid growing demand for military planes and government information technology services. It rose to $53 on the INET electronic brokerage system from its close of $52.20 on the New York Stock Exchange on Monday. Verizon, the largest U.S. telephone company, said it had higher second-quarter profit helped by growth in its wireless arm. Its shares rose to $37.25 on INET from its close of $36.50 on the NYSE on Monday. Second-quarter earnings to date have been an improvement on a year ago but investors are still worried about the outlook for the second half.///