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Wall Street Gathers Courage Ahead Of Housing, Consumer Confidence Data


Sentiment seems to have reversed on Tuesday after yesterday's setback, as traders look ahead with hope to the 2-day Federal Open Market Committee meeting. Earlier in the day, Asian stocks closed on a mixed note, while the European markets are rebounding. Debt auctions by troubled eurozone nations Netherlands, Italy and France were fairly successful. The markets may also receive further cues from new home sales and a consumer confidence reading to be released shortly after the markets open.

As of 6:30 am ET, the Dow futures are rising 25 points, the S&P 500 futures are adding 3.80 points and the Nasdaq 100 futures are moving down 9.25 points.

U.S. stocks declined sharply on Monday, as global growth fears haunted investors after separate surveys by Markit showed that the Chinese and the eurozone manufacturing sectors contracted in April. Additionally, political developments in France and the Netherlands also unnerved the markets.

A 2-day FOMC meeting is scheduled to begin on Tuesday.

The S&P/Case-Shiller home price index is scheduled to be released at 9 am. Economists expect a seasonally adjusted 0.1 percent month-over-month increase in the 20-city composite house price index for February.

At 10 am ET, the Commerce Department is due to release its new home sales report for March. The consensus estimate calls for new homes sales of 318,000 compared to 313,000 in the previous month.

Additionally, the Conference Board is scheduled to release its consumer confidence report for April at 10 am ET. The report is expected to show that the consumer confidence index dipped to 69.7 in April.

The Federal House Finance Agency, or FHFA, is also set to release its house price index for February at 10 am ET. Economists expect a 0.1 percent month-over-month increase in the house price index after prices remained unchanged in the previous month.

In corporate news, Texas Instruments (TXN) reported first quarter results that exceeded estimates, while its earnings guidance surrounded the consensus estimates.

Netflix (NFLX) reported a loss of 8 cents per share for its first quarter compared to the 27 cents per share loss forecast by analysts. Revenues also were better than estimates. The company estimates bottom line results between a loss of 10 cents and earnings of 14 cents per share, while analysts expect a loss of 17 cents per share.

Sanmina-SCI's (SANM) second quarter adjusted loss was in line with estimates, while revenues trailed expectations. The company issued below-consensus revenue and earnings guidance for the third quarter.

PVH (PVH) said it expects first quarter non-GAAP earnings per share guidance to be at least at the high end of its guidance range. The company also said its non-GAAP earnings per share guidance for the full year towards the high end of its previous guidance.

Big Lots (BLI) lowered its first quarter comparable store sales guidance to slightly negative compared to its previous guidance for 2-4 percent growth. Rent-A-Center (RCII) reported better than expected first quarter results, while its 2012 earnings guidance surrounded the consensus estimate.

ACE Limited (ACE), Amgen (AMGN), AmSurg (AMSG), Apple (AAPL), Baidu (BIDU), CB Richard Ellis (CBG), Century Aluminum (CENX), CTS Corp. (CTS). DeVry (DV), Edwards Lifesciences (EW), Healthways (HWAY), International Game Technology (IGT), Juniper Networks (JNPR), Norfolk Southern (NSC), Panera Bread (PNRA), Questar (STR), RF Micro Devices (RFMD), Unisys (UIS) and Websense (WBSN) are among the companies due to be release their quarterly results after the markets close.

The major Asian markets closed on a mixed mote, with the Japanese, Malaysian and the South Korean markets closing lower, while the Australian, Hong Kong, Chinese, Indian, Indonesian, New Zealand, Singaporean and Taiwanese markets ended in positive territory.

Expectations that the U.S. Federal Reserve will drop a hint on further stimulus in the wake of recent soft data gained ground, allaying concerns generated by the political uncertainties in Europe.

The Japanese market retreated for the fourth straight day, with the key Nikkei 225 average declining 74.13 points or 0.78 percent before closing down at 9,468. The European debt fears and apprehensions ahead of the reporting season in Japan kept sentiment subdued.

Australia's All Ordinaries rose 3.60 points or 0.08 percent before closing at 4,434 amid rate cut expectations. Hong Kong's Hang Seng Index closed at 20,677, up 52.77 points or 0.26 percent.

The major European averages are rebounding following yesterday's sharp declines, helped by fairly successful debt auctions by Spain, Italy and the Netherlands.

In corporate news, Shell (RDS) announced a recommended cash offer to buy all outstanding shares of Cove for 220 pence per share. Swiss drug maker Novartis (NVS) reported a decline in its first quarter profit, as its blood pressure drug went off patent in Europe in 2011. The company, however, maintained its outlook for 2012 unchanged.

A report released by French statistical office INSEE showed that French consumer confidence rose to 88 in April from 87 in March. Economists had expected an unchanged reading for the month. A separate report released by the U.K. Office for National Statistics showed that public sector borrowing in the U.K. rose sharply to 18.2 billion pounds in March after excluding temporary effects of financial interventions.

by RTTNews Staff Writer

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