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Futures flat as oil's rebound offsets Alcoa

by : Reuters

Date : Wed, 09 Jul 2008 11:47:00 GMT





By Ellis MnyanduNEW YORK (Reuters) - Stock futures were little changed on Wednesday as oil prices rebounded, reviving concern that higher energy costs on businesses and consumers could hurt the outlook for economic growth and corporate profits.News that Iran test-fired nine missiles and warned the United States and Israel it was ready to retaliate if they attacked the Islamic Republic over its disputed nuclear projects pushed up oil prices by $2 a barrel.The rise in oil prices offset optimism over aluminum producer Alcoa Inc 's lt;AA.Nstronger-than-expected quarterly profit. In addition, concerns about higher oil prices could diminish the appetite for bargain hunting by investors as stocks remain near 2008 lows.Shares of Alcoa, a Dow component, rose more than 6 percent in Europe.With little in the way of economic indicators on tap, oil was poised to dictate the market 's direction when the Energy Department is due to release its weekly report on petroleum inventories at 10:35 a.m.. "What happens with oil and Iran, that is what 's going to dictate the market 's direction, " said Matt McCall, president of Penn Financial Group in Denver, Colorado. "Alcoa 's news was a bit of a good start to the earnings season. The other thing the market is really going to move on are technicals. "S amp;P 500 futures were 0.2 point lower and about even with fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.Dow Jones industrial average futures fell 5 points, and Nasdaq 100 futures rose 3.25 points.U.S. front-month crude rose $1.55 to $137.58 a barrel, a day after it settled on the New York Mercantile Exchange down $5.33, or 3.8 percent, at $136.04 a barrel.In corporate news, a blind trust run by New York City Mayor Michael Bloomberg is willing to pay between $4.5 billion and $5 billion to buy Merrill Lynch amp; Co 's lt;MER.N20 percent stake in financial news and data provider Bloomberg LP, the New York Post reported on Wednesday, citing sources.U.S. stocks ended higher in a turbulent session on Tuesday as a pullback in oil prices eased worries about consumer and business spending, while financial shares gained after the Fed chairman said he may keep open a lifeline for banks.(Editing by Kenneth Barry) lt;br gt;(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.



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