Earnings Fears Sink Futures

U.S. stock futures were under pressure as investors worried that a fresh slate of corporate results this week could show continued pressure from the world-wide recession.

About 30 minutes before the start of trading in New York, futures on the Dow Jones Industrial Average were lower by about 120 points. S&P 500 and Nasdaq futures were also weaker. Changes in futures do not always accurately predict early market moves after the opening bell.

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Investors will be watching another busy week of corporate results. According to Thomson Reuters, 62% of the 52 S&P 500 companies that have posted first-quarter results have beat analyst estimates, while 33% have missed.

Bank of America's first-quarter net income more than tripled as the bank said its Merrill Lynch acquisition contributed more than $3 billion to its bottom line. The results echoed recent results from other banks which have suggested some healing in the battered financial sector, though investors fear that the recession could cut into profits from consumer lending. Bank of America shares were off by about 8%.

Elsewhere, Eli Lilly shares rose 3% after the drug maker reported a 23% jump in its earnings. Halliburton posted a 35% drop in first-quarter net income amid a steep downturn in North American drilling activity. Its shares fell about 6%.

Markets are pointed lower, taking a breather ahead of another big week for U.S. corporate earnings, even as Oracle unveils a surprise deal to buy Sun Microsystems for $7 billion in cash. Dow Jones Newswires' Andrew Dowell has your day ahead.

Oracle said that it plans to acquire Sun Microsystems for $5.6 billion excluding cash and debt. The deal comes after Sun's talks to sell itself to International Business Machines unraveled. Sun's shares were recently up 27% while Oracle fell 5%. IBM, which reports earnings after the close on Monday, declined 1%.

Treasury prices rose on Monday and the dollar fell against the yen while rising against the euro. Crude-oil futures declined more than $3 a barrel to about $47 and commodities prices more broadly were weaker.

International stocks were mixed, with gains in Asia and declines in Europe. The Nikkei 225 edged up 0.2% and the Shanghai Composite rose 2.1%. Banks and metals producers dropped as the pan-European Dow Jones Stoxx 600 fell 2.6%.