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Pre-Market Primer: Tech Earnings Strong So Far; Britain to Vote on EU Membership

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Suddenly, a "Brexit" is in the cards.

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Stocks are little changed this morning as key companies beat on earnings, Republicans push back the debt ceiling debate to spring, and the world's elite hobnob in Davos.

Dow (INDEXDJX:.DJI) futures were up 0.01% at 13,698. Futures contracts on the S&P 500 (INDEXSP:.INX) slipped 0.06% to 1,488.50 and Nasdaq (INDEXNASDAQ:.IXIC) futures gained 0.12% to 2,754.25. European shares are flat at midday. Japanese stocks slipped 2.08% as the yen strengthened to 88.31 to the dollar.

Today, House Republicans will put forth their plan to extend the US debt limit for about four months. The president plans to sign the bill if it passes through the Senate as well.

Today's focus will be on corporate earnings as 32 S&P 500 Index component companies report results for the previous quarter.

Yesterday, Google (NASAQ:GOOG) reported that its core desktop search business is still strong, but the company struggles to make the same profits from advertising on mobile phones. The company's overall cost-per-click declined 6% from a year ago, a move attributed to mobile's increasing share. Advertisers pay less for a click on a mobile ad. The company said that revenue increased 36% on the year to $14.42 billion and profits rose 6.7% to $2.89 billion. Adjusted earnings per share was $10.65.

IBM (NYSE:IBM) also beat expectations with EPS of $5.39. Net income rose 10% to $6.1 billion from a year earlier, though revenue dropped 1% to $29.3 billion.

Apple (NASDAQ:AAPL) will report earnings after the bell. The company is expected to report EPS of $13.44, its first year-over-year drop in 10 years. Revenue is expected to rise 18.1% thanks to sales of the new iPhone.

In the World Economic Forum's Davos Summit, British Prime Minister David Cameron said that he plans to hold a public referendum on the country's membership in the European Union before the end of 2017 if he wins the 2015 election.

"I am in favor of a referendum. I believe in confronting this issue – shaping it, leading the debate. Not simply hoping a difficult situation will go away," Cameron said. "Of course Britain could make her own way in the world, outside the EU, if we chose to do so. So could any other Member State. But the question we will have to ask ourselves is this: Is that the very best future for our country?"

French foreign minister Laurent Fabius said that he would "roll out the red carpet" if Britain wishes to leave.

British unemployment in December 2012 unexpectedly fell by 37,000 to 2.5 million. Spain reported that GDP fell by 0.6% in the fourth quarter after dropping 0.3% in the September quarter.

Twitter: @vincent_trivett
No positions in stocks mentioned.
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