Dow Heading for Flat Start on Fiscal-Cliff Doubts

LONDON -- Stock index futures at 7 a.m. EST suggest that the Dow Jones Industrial Average (DJINDICES: ^DJI  ) may open up by 0.09% this morning, while the S&P 500 (SNPINDEX: ^GSPC  ) is expected to rise by 0.08% when trading starts.

With no economic data scheduled for release today, investors' attention will once more be focused on the fiscal-cliff negotiations. Yesterday saw the Republicans counter President Obama's proposal with one of their own, which suggests there is still a considerable divide between the two sides. While President Obama's proposal included $1.6 trillion of additional taxes, the Republicans' proposal yesterday included tax reforms and spending cuts worth $2.2 trillion.

Several companies are due to report quarterly earnings today, including homebuilder Toll Brothers, streaming-music service Pandora, and AutoZone. Big Lots reported a quarterly loss from continuing operations of $6 million, or $0.10 per share, before markets opened this morning, beating its guidance for a loss of between $0.20 and $0.30 per share. The firm said it had opened 27 news stores in the third quarter and invested $51 million to repurchase 1.6 million shares.

European markets
European markets rose this morning despite investors' concerns about the state of the global economy. Limited good news was provided by the latest German export figures, which showed that exports from the eurozone powerhouse rose by 3.6%, led by 26% year-on-year growth in exports to the U.S.

However, sentiment remains cautious, as yesterday's mixed U.S. economic data did not alleviate the growing fear that a solution to the fiscal cliff is still far off, while in Europe this morning, eurozone finance ministers clashed over the proposed eurozone banking union, with press reports suggesting a fundamental divide between the French and German positions. Negotiations are expected to continue at another meeting later this month.

As of 7:30 a.m. EST, the DAX is up 0.25%, the CAC 40 is up 0.85%, the FTSE MIB is 1.2% higher, and the IBEX 35 is up 0.6%. In London, the FTSE 100 (FTSEINDICES: ^FTSE  ) is up just one point. RSA Insurance Group and pharmaceutical firm Shire topped the leaderboard, gaining around 2% each, while Tullow Oil drilled down to the bottom of the table, plunging 5% after reporting that it had failed to find oil in its Zaedyus-2 appraisal well.

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