Stimulus hopes are brightening and offering cheer to Wall Street on Tuesday, as reflected by the U.S. index futures, which are pointing to a moderately higher opening. The U.S. Federal Open Market Committee is set to meet today for a 2-day meeting, although the post-meeting statement is due only tomorrow. Some policy action is also expected from the European Central Bank, especially after economic reports showed that inflation in the eurozone is softening in line with expectations and unemployment rose to a new record high. A few key domestic economic reports on consumer spending, manufacturing and consumer confidence may also dictate market movement.
As of 6:15 am ET, the Dow futures are adding 36 points, the S&P 500 futures are firming up by 3.30 points and the Nasdaq 100 futures are moving up 9 points.
U.S. stocks went about Monday's session in a lackluster manner before closing lower, as traders exercised caution in the wake of recent gains. Even stimulus hopes could not help sustain the buying momentum.
On the economic front, the Federal Open Market Committee, the monetary policy-setting arm of the Federal Reserve, is due to meet for a 2-day meeting beginning today.
The Bureau of Economic Analysis is due to release its personal income & outlays report for June. Economists expect the report, which is due out at 8:30 am ET, to show that personal income rose 0.4 percent, while personal spending is expected to have edged up by 0.1 percent. In May, personal income edged up 0.2 percent and personal spending remained unchanged.
Around the same time, the Labor Department will release its employment cost index for the second quarter. The consensus estimates call for a 0.5 percent increase in the index compared to 0.4 percent growth in the first quarter.
The S&P/Case-Shiller home price index, which tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S., is scheduled to be released at 9 am. Economists expect a seasonally adjusted 0.5 percent month-over-month increase in the 20-city composite house price index for May.
The results of the Institute of Supply Management-Chicago's business survey for July are scheduled to be released at 9:45 am ET. Economists expect the business barometer index based on the survey to edge down to 52.5 from 52.9 in June.
The Conference Board is scheduled to release its consumer confidence report for July at 10 am ET. The report, which is based on a survey of 5,000 U.S. households, is expected to show that the consumer confidence index declined to 61.5 in July from 62 in June.
Jacob's Engineering (JEC) reported third quarter earnings that beat estimates by a penny, while its revenues missed expectations. The company maintained its 2012 earnings guidance that surrounds the consensus estimate.
Regeneron (REGN) said the U.S. FDA issued a complete response letter for the sBLA for ARCALYST, its injection for subcutaneous use for the prevention of gout flares in patients initiating uric acid-lowering therapy.
Seagate Technology (STX) reported fourth quarter adjusted earnings and revenues that trailed estimates. The company also announced the appointment of Gary Gentry as senior VP, solid state drive business.
PMC-Sierra's (PMCS) second quarter non-GAAP earnings fell to 9 cents per share from 17 cents per share last year. Net revenues fell 19 percent to $137.8 million. The results were below estimates.
Humana (HUM) reported second quarter earnings that came in below expectations, while its consolidated revenues also trailed estimate. The company lowered its full year earnings guidance, which is below the consensus estimate. At the same time, it maintained its revenue guidance, which surrounds the consensus estimate.
The major Asian markets advanced for the fourth straight session, as stimulus hopes gained ground. Japan's Nikkei 225 average closed up 59.62 points or 0.69 percent at 8,695. Australia's All Ordinaries closed up 22.50 points or 0.53 percent at 4,289, with energy stocks rebounding and supporting the upside. Meanwhile, Hong Kong's Hang Seng Index ended at 19,797, up 211.41 points or 1.08 percent.
In economic news, a government report showed that Japan's household spending rose 1.6 percent year-over-year in June compared to expectations for a 2.9 percent increase. A separate report showed that the unemployment rate came in at 4.3 percent in June compared to 4.4 percent in July. Housing starts in Japan declined 0.2 percent year-over-year in June following a 9.3 percent increase in May. Economists expected a 9.4 percent increase for the month.
European stocks are trading mixed as traders stayed invested in stocks on stimulus hopes despite the release of disappointing domestic earnings. The French CAC 40 Index and the German DAX Index are advancing, while the U.K.'s FTSE 100 Index is slipping modestly.
A consumer confidence survey by the GfK/NOP showed that U.K.'s consumer confidence remained at depressed levels in July. The consumer confidence index held steady at -29. A report released by the German Federal Statistical Office showed that retail sales fell 0.1 percent in June compared to the 0.5 percent increase expected by economists. The number of unemployment individuals in Germany rose by 7,000 in line, according to a government report. The increase was in line with expectations. The statistical agency's survey showed that the jobless rate slid to 5.4 percent in June from 5.5 percent in May.
BP (BP) said its second quarter adjusted earnings declined to $3.7 billion from the year-ago quarter's $5.7 billion due to weak production and margins. Swiss investment bank UBS (UBS) reported a sharp decline in second quarter profit due to weakness at its investment banking business. Germany's Deutsche Bank also reported a 63 percent drop in its second quarter pre-tax profits.
by RTT Staff Writer
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