Costco reports earnings; Fortune Brands plans to split into three By Simon Kennedy, MarketWatch LONDON (MarketWatch) — U.S. stock futures pointed lower Wednesday as investors digested a narrower earnings forecast from Texas Instruments Inc. and the latest quarterly results from Costco Wholesale Corp. Futures on the Dow Jones Industrial Average (DJZ10 11,327, -28.00, -0.25%) fell 28 points to 11,327 and S&P 500 futures (SPZ10 1,223, -0.50, -0.04%) dipped 2.30 points to 1,220.90 Nasdaq 100 futures (NDZ10 2,192, +1.50, +0.07%) were down 1.5 points at 2,188.50. U.S. stocks ended the day Tuesday broadly flat as a strengthening dollar took the steam out of early enthusiasm over a deal to extend tax cuts. The Dow Jones Industrial Average ended the day down around 3 points. There’s little on the economic calendar for Wednesday, though there’s plenty of data due later in the week, including jobless claims and wholesale inventories figures on Thursday and consumer-confidence data on Friday. The dollar extended its gains against other major currencies. The euro dropped 0.2% to $1.32232 and the greenback rose 0.6% against the yen to ¥83.982. Commodity prices weakened as the dollar rose, with gold futures dropping over $13 an ounce in electronic trading. Treasury yields also continued to rise following the U.S. deal to extend tax cuts. The stimulus created by the cuts is a contrast to the path of austerity being followed in Europe, said Gary Jenkins, head of fixed-income research at Evolution Securities, in a note to clients. “It will be fascinating to watch events unfold over the next few years to discover whether both approaches are the correct response, although clearly the U.S. has a much greater flexibility with regard to how to deal with the economic situation than many European countries,” Jenkins said. On the corporate front, Texas Instruments (TXN 33.41, +0.46, +1.40%) late Tuesday narrowed its earnings and revenue forecasts for the fourth quarter. The company expects earnings to be between 61 cents and 65 cents a share, with the midpoint of that range in line with Wall Street forecasts. Costco (COST 69.90, +0.26, +0.37%) said its fiscal first-quarter net income rose 18% on 11% higher total sales and 7% higher comparable sales. For the quarter ended Nov. 21, Costco earned $312 million, or 71 cents a share. Analysts had expected earnings of 69 cents a share. Other shares that could draw attention later in the session include McDonald’s Corp. (MCD 80.34, +0.76, +0.96%) , which is due to report November sales figures. Fortune Brands Inc. (FO 61.15, -0.30, -0.49%) said it will split itself into three businesses. The company said it will spin off its home-and-security business and spin off or sell its golf division, while continuing to run its liquor business as a publicly-traded company. Home Depot Inc. (HD 33.55, +0.21, +0.63%) said it expects adjusted 2010 earnings of $1.97 a share. Starwood Hotels & Resorts Inc. (HOT 59.92, -0.16, -0.27%) said it expects earnings per share to grow by between 35% and 42% a year for the next three years. European markets were also trading in a tight range Wednesday. The German DAX 30 index slipped 0.2%. See Europe Markets. Japan’s Nikkei 225 closed up 0.9% as the weaker yen helped boost export stocks. See Asia Markets.

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