U.S. stock index futures pointed to a higher open on Tuesday as a pair of big M&A deals boosted market optimism and pointed to a rebound from the broad decline in the previous session, which was the S&P 500’s weakest day in a month.
Energy shares will be in focus as crude oil continued its recent volatility. U.S. crude futures CLc1 fell 1.1 percent to $68.21 per barrel. While crude prices jumped on Monday, that followed a plummet of more than 10 percent last week that took it to multi-year lows.
Declines in energy shares have corresponded with the weakness in oil, which is down more than 30 percent from a recent high. The S&P 500 energy index .SPNY is the weakest industry group by far this year, and the only one to be negative for 2014.
In the latest deal news, Cypress Semiconductor Corp (CY.O) agreed to buy Spansion Inc (CODE.N) in an all-stock deal valued at about $4 billion.
Separately, Otsuka Pharmaceutical Co Ltd said it would buy Avanir Pharmaceuticals Inc (AVNR.O) for about $3.5 billion.
Cypress rose 13 percent to $11.75 in premarket trading while Spansion was up 18 percent at $26.90. Avanir added 13.5 percent to $17.03.
Apple Inc (AAPL.O) fell 0.7 percent to $114.22 before the bell, building on a decline of 3.2 percent on Monday, which was its biggest one-day drop since September. The biggest U.S. company by market cap was hit by unusual trading activity shortly after the market opened on Monday, tumbling in the span of a minute in what some traders deemed a “mini-flash crash.”
Investors are looking ahead to a reading of October construction spending, due at 10 a.m. (1500 GMT) and seen rising by 0.6 percent. Markets may be vulnerable to a weak reading, which would follow tepid reports on manufacturing on Monday and could prompt traders to take profits.
Despite Monday’s decline, equities have been strong of late and continue to hover near record levels. Major indexes closed out a sixth straight week of gains last week.
REUTERS
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