Dow futures largely flat; First Republic is taken over

Investing.com -- U.S. stocks are seen opening largely unchanged Monday, with investors digesting the takeover of First Republic Bank (NYSE:FRC) at the start of a week that includes more corporate earnings, a Federal Reserve policy meeting, and the widely-watched monthly jobs report.

At 06:45 ET (10:45 GMT), the Dow futures contract was up just 3 points, S&P 500 futures traded largely flat, and Nasdaq 100 futures dropped 10 points, or 0.1%.

United States regulators said earlier Monday that First Republic Bank has been seized, with a deal agreed to sell the regional lender to JPMorgan Chase (NYSE:JPM), hopefully calming some of the market’s nerves over systemic risk given this is the third major U.S. institution to fail in two months.

JPMorgan will assume First Republic Bank assets, including $92 billion of deposits, but is not taking on the troubled lender's corporate debt or preferred stock.

First Republic Bank shares tumbled 40% in premarket trading, having lost 97% of its value this year, while JPMorgan shares rose 2.4%.

The main indices closed higher Friday, at the end of a positive month. The blue-chip Dow Jones Industrial Average gained 2.5% in April, its best month since January, the broad-based S&P 500 closed up 1.5%, while the tech-heavy Nasdaq Composite just edged higher.

Helping the market post these gains have been generally better-than-feared earnings. A little over half of S&P 500 companies have reported so far, and first-quarter earnings are on track to fall 3.7% for the period, a smaller drop than the 6.7% decline previously projected by FactSet.

The earnings deluge continues this week, with numbers from Apple (NASDAQ:AAPL), the largest U.S. company by market value, the highlight. The report from the iPhone maker, due on Thursday, is a bellwether for global consumer demand and its results have the potential to move the wider market.

The main results due Monday come from Norwegian Cruise Line (NYSE:NCLH) and MGM Resorts (NYSE:MGM), and can provide information as to whether consumers still have the disposable income to spend on leisure activities.

The main economic release this week is Friday’s April nonfarm payrolls number, which is expected to come in with a 180,000 increase, solid enough but would mark the third straight month of decelerating employment growth.

Ahead of this, Monday sees the release of the April ISM manufacturing PMI, which is expected to confirm that the country’s manufacturing sector remains in contraction.

Oil prices sold off sharply Monday, weighed by weak Chinese manufacturing data, which called into question the extent of the recovery at the world’s largest importer of crude from the lifting of its COVID restrictions.

Data released Sunday showed that China's official manufacturing purchasing managers' index slipped into contraction territory in April, surprisingly falling to 49.2 from 51.9 in March.

By 06:45 ET, U.S. crude futures traded 2.1% lower at $75.14 a barrel, while the Brent contract dropped 2% to $78.74.

Additionally, gold futures fell 0.2% to $1,996.20/oz, while EUR/USD traded 0.1% lower at 1.1006.