Stocks set for modest gains

U.S. stocks were set to open slightly higher Tuesday, supported by solid results from Apple and Texas Instruments and despite disappointing news about the housing market.

S&P 500, Nasdaq-100 and Dow Jones industrial average futures were higher.

Futures measure current index values against their perceived future performance and offer an indication of how markets may open when trading begins.

The Dow reclaimed 10,000 on Monday, hitting its highest point in more than a year, driven by a weak dollar, higher commodity prices and earnings optimism.

Going forward, this puts a certain amount of pressure on stocks, since they've already made recent gains and investors have high expectations for the current corporate reporting period, said Peter Cardillo, chief market economist for Avalon Partners.

"The market has already priced in the good news on earnings and increased guidance, however the market is subject to some kind of a pullback purely on an overbought condition," said Cardillo, though he added that such declines would be small.

Company results: DuPont (DD, Fortune 500) reported third-quarter earnings of 45 cents per share, beating the consensus estimate of analysts surveyed by Thomson Reuters. But the Wilmington, Del.- based chemical maker missed on revenue, which fell 18% year-over-year to $6 billion. The company narrowed its full-year earnings guidance to a range of $1.95 to $2.05 per share, toward the high end of its previous forecast.

Pfizer (PFE, Fortune 500) reported third-quarter sales of $11.6 billion, a 3% decline from a year ago, beating expectations. The New York City-based drugmaker reported a 26% surge in earnings, to net income of $2.9 billion, or diluted earnings per share of 43 cents. Pfizer, which completed its acquisition of drugmaker Wyeth on Oct. 15, increased full-year guidance to a revenue range of $49 billion to $50 billion, and diluted EPS of $1.45 to $1.50.

Atlanta-based Coca-Cola (KO, Fortune 500) reported third-quarter earnings of 81 cents per share, down 1% from the prior year and matching expectations. Net revenues decreased 5% year-to-date to $8 billion, slipping below the forecast. Consolidated net income of $1.9 billion was flat, compared to the year-ago quarter.

Heavy equipment company Caterpillar (CAT, Fortune 500), based in Nashville, Tenn., reported third-quarter revenue of $7.3 billion, down 44% from the year-ago quarter, which was lower than expectations. Profit was $64 cents per share, down 75 cents EPS from the year-ago quarter, which the company blamed on "significantly lower" sales volume.

Caterpillar expects 2009 revenues of $32 billion to $33 billion and increased the profit range to $1.10 to $1.30 per share. In 2010, the company expects to increase revenues by 10% to 25% as dealers reduce the inventory pile-up that has impacted sales this year.

UnitedHealth (UNH, Fortune 500) reported an 8% increase in year-over-year revenue to $21.7 billion in the third quarter, as well as earnings of 89 cents per share.

Apple (AAPL, Fortune 500) posted stellar earnings after the closing bell Monday, thanks to a record surge in iPhone and Mac sales. Apple grew its PC market share to a 15-year high in the third quarter, despite the recession and an average selling price of more than $1,200. The company's stock hit a record high in after-hours trading.
0:00 /2:31Apple's most profitable quarter

Texas Instruments (TXN, Fortune 500), which also reported late Monday, posted earnings and sales that topped Wall Street's estimates, and raised its outlook.

Stocks have surged recently, buoyed by better-than-expected earnings reports. But some worry that the Dow's move above 10,000 could be a hoax and that investors should be more skeptical of the rally.

Economy: The government reported that housing starts slipped to the annual rate of 590,000 in September, from 598,000 the prior month. This fell short of the 610,000 rate forecast by a consensus of economists surveyed by Briefing.com.

Building permits fell to the annual rate of 573,000 in September from 579,000 in August. This fell short of the 595,000 expected by Briefing.com consensus.

The government also released its report on inflation at the wholesale level for September. The Producer Price Index slipped 0.6% in September, seasonally adjusted, following a rise of 1.7% in August. Without including food and energy prices, the core PPI edged down 0.1% in September, compared to an August rise of 0.2%.

World markets: Stocks in Asia rallied, with the Nikkei in Japan gaining nearly 1%. The mood was more subdued in Europe, where the major indexes were modestly higher in midday trading.

Money and oil: The dollar was flat against the euro, but lower versus the yen and the British pound. The price of oil slipped 5 cents to $79.56 a barrel after touching $80 for the first time in a year.