U.S. stocks are set for a racing start on Friday, the last trading session of the second quarter, as traders go euphoric over the announcements made by the EU yesterday. Some radical announcements made after the conclusion of the first day of the summit came as a welcome relief for traders, who were nurturing very little hopes out of the meeting. The second day of the summit may shed more clarity on the measures announced yesterday. The markets may also move, although not appreciably, to some key first tier domestic economic data on consumer spending, manufacturing and consumer sentiment.
European Council president Herman Van Rompuy told in a press conference yesterday that the leaders have agreed on permitting the EFSF and the ESM to directly recapitalize ailing banks after a single European banking regulator is commissioned. Additionally, the leaders agreed that ESM loans to Spanish banks will not have senior creditor status. The European Central bank is set to act as an agent for the rescue funds in market operations.
As of 6:30 am ET, the Dow futures are adding 122 points and the S&P 500 futures are gaining 16.60 points, while the Nasdaq 100 futures are moving up 30.75 points.
U.S. stocks declined on Thursday, although ending off the lows of the session, as hopes of some EU actions helped cut some of the losses.
On the economic front, the Bureau of Economic Analysis is due to release its personal income & outlays report for May at 8:30 am ET. Economists expect the report to show that personal income rose 0.3 percent, while personal spending is expected to have remained unchanged. In April, personal income edged up by 0.2 percent and personal spending rose by 0.3 percent.
The results of the Institute of Supply Management-Chicago's business survey for June are scheduled to be released at 9:45 am ET. Economists expect the business barometer index based on the survey to improve to 53.1 from 52.7 in May.
Additionally, the Reuters and the University of Michigan's final report on the consumer sentiment index for June is scheduled to be released at 9:55 am ET. The consumer sentiment index is expected to be left unrevised at 74.1.
In corporate news, Accenture's (ACN) third quarter earnings per share were ahead of estimates, while its revenues were about in line with estimates. While the company issued a below-consensus fourth quarter revenue guidance, its full year revenue growth expectation was above estimates.
Nike (NKE) reported fourth quarter earnings of $1.17 percent, up 6 percent year-over-year, and revenues of $6.5 billion, up 12 percent year-over-year. The results trailed expectations.
TIBCO Software (TIBX) said its second quarter non-GAAP earnings rose to 26 cents per share from 21 cents per share last year, while revenues climbed to $247.4 million from the year-ago revenues of $216.4 million. The results exceeded estimates.
Research In Motion (RIMM) reported first quarter that trailed expectations. For the second quarter, the company expects an operating loss, as it grapples with an increasing competitive environment and product delays. The company also announced plans to eliminate 5,000 jobs.
The major Asian averages closed notably higher, enthused by the announcement by Rompuy. Along with the equities, commodity prices also rallied, offering further support to the markets. In the process, the markets largely ignored a batch of domestic data released from the region.
Japan's Nikkei 225 average ended up 132.67 points or 1.50 percent at 9,007. A majority of stocks advanced in the session. Australia's All Ordinaries closed 49.90 points or 1.22 percent higher at 4,136. Most sectors, barring consumer staple and IT stocks, advanced. Energy and material stocks were among the biggest gainers of the session.
Hong Kong's Hang Seng Index ended at 19,417, up 391.66 points or 2.06 percent.
European stocks are also surging following the developments in the EU summit.
On the economic front, the results of a consumer confidence survey by the GfK/NOP showed that U.K.'s consumer confidence index remained unchanged at -29 in June, in line with expectations.
A report released by the German Federal Statistical Office showed that retail sales fell 0.3 percent month-over-month in May following a 0.2 percent drop in April. The decline belied expectations for a 0.2 percent increase.
French statistical agency confirmed the stagnation the nation experienced in the first quarter, according to revised estimates. A separate INSEE report showed that French consumer spending rose 0.6 percent month-over-month in May, faster than the 0.1 percent growth expected by economists.
Inflation report released by Eurostat showed that the eurozone's annual inflation remained unchanged at 2.4 percent, in line with estimates. The inflation represents the lowest level since February 2011.
In corporate news, Anheuseur-Busch InvBev (BUD) announced an agreement to buy the remaining stake it does not already own in Mexico's Grupo Modelo for $9.15 per share in cash or a total transaction value of $20.1 billion.
by RTT Staff Writer
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