U.S. Stock-Index Futures Rise; Cendant, Merck Shares Advance...

U.S. Stock-Index Futures Rise; Cendant, Merck Shares Advance

Oct. 24 (Bloomberg) -- U.S. stock-index futures rose before the busiest week of earnings this quarter, with companies including Merck & Co., American Express Co. and Texas Instruments Inc. scheduled to report today.

Cendant Corp., the world's biggest travel and real-estate services company, rose in Germany after saying it will split into four companies to revive its stock price amid a slowdown in the travel industry.

Standard & Poor's 500 Index futures expiring in December added 0.2 percent to 1186.40 as of 10:57 a.m. in London. Dow Jones Industrial Average futures climbed 0.3 percent to 10,267. Nasdaq-100 Index futures rose 0.1 percent to 1577.50.

Last week the S&P 500 dropped for a third straight week, the longest losing streak since March, after Pfizer Inc. and Caterpillar Inc. reduced forecasts. The benchmark index was volatile last week, changing direction every day.

``Earnings season is still in full swing,'' said Philippe Gijsels, chief strategist at Fortis's private investment unit in Brussels, which manages $62 billion. ``The market last week has been like watching a ping-pong match. And this week will probably bring more of the same.''

About a third of the companies in the S&P 500 are scheduled to report results this week.

Earnings at S&P 500 companies will probably expand 11 percent this year and growth will slow to 6.6 percent in 2006, according to Thomson. In the third quarter, profits probably increased an average 14 percent, up from 12 percent in the second quarter, Thomson data show.

Exxon Mobil Corp., Chevron Corp. and ConocoPhillips all declined in Germany as oil traded below $60 a barrel for a third session.

Merck Earnings

Merck, which is reporting before the market opens, said on July 21 that it expects third-quarter net income will be 61 cents to 65 cents a share compared with 60 cents a year earlier. The company will probably say income rose to 63 cents, according to an estimate of 21 analysts. The shares rose 35 cents to $26.53 in Germany.

Separately, Merck faces more litigation in state courts over whether its painkiller Vioxx led to blood clots that may have caused cardiac arrest, the Wall Street Journal reported.

American Express will probably post record third-quarter profit as processing agreements with other card issuers and increased marketing boosted customer spending. Net income probably rose 14 percent to $1 billion, based on the average estimate of five analysts surveyed by Thomson Financial. American Express shares fell 26 cents to $46.89 in France and 38 cents to $46.77 in Switzerland.

Texas Instruments, reporting after the close, is expected to say third-quarter profit rose to 40 cents per share from 32 cents, according to an estimate by Thomson Financial. The shares dropped 19 cents to $30.33 in Germany.

Cendant Split

Cendant, which owns $21 billion of leisure and real-estate assets including Days Inn and the Avis rental-car business, said it will split itself into four parts, each of them publicly listed, which may add as much as $10 billion in market value. The shares rose 82 cents, or 4.1 percent, to $20.91 in Germany.

The New York-based company, which will drop the Cendant name, also reduced its four-quarter and 2006 profit forecasts and scrapped a share buyback.

Declining crude-oil prices continue to put pressure on energy companies. Exxon Mobil, Chevron and ConocoPhillips, fell in Germany. All three companies will report third-quarter earnings this week and their results may reassure investors.

``Cash flows are very strong, profitability is very strong and that will be supportive for these stocks going forward,'' said Brian Hicks, co-manager of the U.S. Global Investors Global Resources Fund in San Antonio. He was talking yesterday.

Worst Performers

Oil-related companies are October's worst performers in the S&P 500. Their industry-group index has fallen 14 percent amid a slide in crude prices. They are headed for their biggest monthly losses since the 1980s after dropping 5.1 percent last week.

Exxon Mobil shares fell 15 cents to $55.22, Chevron shares declined 8 cents to $56.22, while ConocoPhillips stock rose 23 cents to $58.38. All traded in Germany.

Crude oil prices fell as Hurricane Wilma missed most of the Gulf of Mexico's production platforms, heading for the Florida coast. Crude oil for December delivery fell as much as 1.8 percent to $59.56 a barrel in electronic trading on the New York Mercantile Exchange.

Altria Group Inc., the world's largest cigarette maker, gained 40 cents to $73.37 in Germany. Altria could announce early next year that it's splitting into three companies, provided two pending legal decisions go its way, Barron's said on Oct. 22.

Altria, Boston Scientific

Altria, the parent of Philip Morris, could announce the distribution of its 86 percent stake in Kraft Foods to shareholders by the end of the year, David Adelman, an analyst with Morgan Stanley, told Barron's. That would probably be followed by the separation of Altria's overseas tobacco business, Philip Morris International, Barron's said.

Shares in Boston Scientific Corp. gained 45 cents to $24.34 in Germany after Bruce Nudell, an analyst at Sanford C. Bernstein & Co., was quoted in Barron's as saying the shares may rise to $29 by next year on the strength of sales of its Taxus drug-eluting stent.

Verizon Communications Inc., the largest U.S. phone company, is poised to benefit from the spending of billions of dollars to string fiber-optic cable directly to homes and businesses, Barron's said. The stock rose 36 cents to $29.88 in Germany.

Visteon Corp., the No. 2 U.S. maker of auto parts, fell 13 cents to $7.72 in Germany after saying it will restate financial results for 2002 through 2004 because of errors in accounting for freight, raw materials and other supplier costs. The restatement will widen losses by 3 percent in 2004, 2 percent in 2003, and 4 percent in 2002.

Sovereign Bancorp

Spain's Banco Santander Central Hispano SA is close to taking a stake in Philadelphia's Sovereign Bancorp Inc., the Wall Street Journal reported, citing people familiar with the negotiations. That move would be the first significant entry into the U.S. market for Santander. Unidentified representatives for Sovereign and Santander wouldn't comment, the newspaper said. Sovereign rose 36 cents to $23.73 in Germany.

Computer Sciences Corp., which manages computers and integrates technology systems for the U.S. military and government departments, may receive a takeover offer from a group of private-equity firms, the Wall Street Journal reported, citing people familiar with the matter. The shares didn't trade in Europe.

The S&P 500 lost 0.6 percent to 1179.59 last week. The Dow average fell 0.7 percent. The Nasdaq, which gets more than two- fifths of its value from computer-related shares, added 0.8 percent.