Despite the encircling economic gloom, Wall Street seems to be on track to put on a brave face in the wake of expectations that stimulatory support is in the pipeline. Data released in recent times have set tongues wagging about some aggressive policy measures world over to stem the economic rot. Traders hopefully look ahead to Federal Reserve Chairman Ben Bernanke's semi-annual testimony before the Senate Banking Committee for any clues on further stimulus announcements. The results of homebuilder confidence survey and the industrial production report for June may also give some direction to the markets.
As of 6:15 am ET, the Dow futures are up 43 points and the S&P 500 futures are gaining 4.50 points, while the Nasdaq 100 futures are advancing 9.50 points.
U.S. stocks retreated on Monday in the face of mixed economic data and toned down expectations concerning global growth. The major averages opened lower following the release of separate reports showing an unexpected decline in retail sales and a bigger than expected expansion by the manufacturing sector in the New York region.
On the economic front, Bernanke is scheduled to speak before the Senate Banking Committee to give his semi-annual monetary policy testimony at 10 am ET.
The Federal Reserve's industrial production report is due out at 9:15 am ET. Economists estimate a 0.3 percent increase in the industrial production performance for June, while manufacturing output growth is estimated to have increased by 0.2 percent. At the same time, capacity utilization may have edged up by 0.2 percentage points to 79.2 percent. In May, industrial output fell 0.1 percent.
The National Association of Homebuilders is scheduled to release the results of its July survey on homebuilders' confidence at 10 am ET. The consensus estimates call for the index to increase by 1 point to 30.
Additionally, the consumer price index for June is scheduled to be released at 8:30 am ET. Economists expect the headline index to have remained unchanged compared to a 0.2 percent increase in core inflation. In May, consumer prices fell 0.3 percent, while core consumer prices rose 0.2 percent.
The Treasury Department is due to release a report on the flows of financial instruments into and out of the U.S. for April at 9 am ET.
In corporate news, Yahoo (YHOO) announced the appointment of former Google executive Marissa Mayer as its president and CEO, effective July 17th, 2012.
Packaging Corp. of America's (PKG) second quarter results exceeded estimates, while its guidance was also above the consensus estimate. Brown & Brown (BRO) reported preliminary second quarter results, expecting earnings of 29 cents per share on revenues of $290.92 million. The results trailed estimates.
FLIR Systems (FLIR) released preliminary second quarter earnings and revenues that were below expectations. The company also lowered its 2012 outlook below the consensus estimates.
Cintas (CTAS) reported fourth quarter earnings that were in line, while its revenues came in below estimates. Assuming further deterioration in economic conditions, the company said it estimates 2013 earnings of $2.47 to $2.55 per share on revenues of $4.25 billion to $4.35 billion.
J. B. Hunt (JBHT) reported second quarter earnings of 67 cents per share on revenues of $1.26 billion. The earnings were in line, while the revenues were below expectations.
AAR Corp. (AIR), CSX (CSX), Fidelity National Information (FIS), Fulton Financial (FULT), Intel (INTC), Stanley Furniture (STLY), United Rentals (URI), Wynn Resorts (WYNN) and Yahoo! (YHOO) are among the companies due to report their results after the markets close.
The major Asian markets closed higher despite the negative lead from Wall Street overnight. The negative catalysts apparently strengthened hopes of stimulus measures from the Federal Reserve and led to some buying.
Japan's Nikkei 225 average closed up 30.88 points or 0.35 percent at 8,755. The Japanese market was closed yesterday on account of a public holiday. Financial, pharma, real estate, retail and telecom stocks advanced, while most export stocks declined.
Australia's All Ordinaries added 32.10 points or 0.77 percent before closing at 4,175. Hong Kong's Hang Seng Index ended 333.99 points or 1.75 percent higher at 19,455.
The minutes of the Reserve Bank of Australia's July monetary policy meeting showed that the monetary policy board did not feel the necessity to change its official cash rate, as the domestic economy continued to gather momentum.
European stocks are also pushing higher amid some volatility ahead of Bernanke's semi-annual Congressional testimony. Spain auctioned 3.562 billion euros worth of 12-month and 18-month treasury bills at benign yields.
In corporate news, Alcatel-Lucent (ALU) warned that it will not meet its full year adjusted operating profit margin guidance, given the tough macroeconomic environment.
On the economic front, the U.K. Office for National Statistics reported that the U.K. annual inflation eased to 2.4 percent in June from 2.8 percent in May. Economists expected the inflation rate to have remained unchanged at 2.8 percent.
A survey by Zew Institute showed that German economic confidence deteriorated in July. The economic confidence index fell by 2.7 points to -19.6, marking the third straight month of declines. The index remained notably below its long-term average of 24. The current conditions index fell by 12.1 points to 21.1.
by RTT Staff Writer
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