Wall Street is persisting with its optimism, as reflected by the U.S. index futures, which point to a modestly higher opening on Monday. With Spain and Italy straddled with huge debt piles, the markets have built up expectations that the European Central Bank will act sooner than later. In the absence of any major domestic economic data, the markets may stay focused on a speech by Federal Reserve Chairman Ben Bernanke and a few important earnings announcements. The overbought levels of the markets may deter traders from taking up further positions in the absence of any other compelling catalysts.
As of 6:15 am ET, the Dow futures are adding 10 points, the S&P 500 futures are firming up by 2.50 points and the Nasdaq 100 futures are moving up 12 points.
U.S. stocks advanced modestly in the week ended August 3rd, helped by stronger than expected job gains reported for July by the Labor Department. The Dow Industrials and the S&P 500 Index had ended at their highest closing levels in 3 months.
Relative calm dawns on Main Street, as the unfolding week's calendar has very little market moving economic news. Speeches by Federal Reserve Chairman Ben Bernanke and the weekly jobless claims report are among the market moving economic events of the week.
Traders may also focus on the Federal Reserve's consumer credit report for June and the Commerce Department's trade balance report for June. The Labor Department's import and export price indexes for July, the preliminary second quarter productivity & costs report, the Commerce Department's wholesales inventories report for June, the Treasury Budget for July and Treasury auctions of 3-year and 10-year notes and 30-year bonds round up the economic events of the week.
In corporate news, Changyou's (CYOU) second quarter results as well as guidance were above estimates. Separately, the company announced a special one-time cash dividend of $3.80 per ADS. Meanwhile, Sohu.com (SOHU), the parent of Changyou, also reported better than expected second quarter results. The company expects third quarter non-GAAP earnings of 50-55 cents per ADS on revenues of $272 million to $277 million. While the third quarter guidance was soft, the revenue guidance surrounded the consensus estimate.
AIG (AIG) announced that the Treasury has prices an offering of 163.93 million of its common stock at the public offering price of $30.50 per share.
Berkshire Hathaway (BRKA) reported second quarter operating earnings of $2,252 per Class A shares compared to $1,640 per Class A share. The earnings were ahead of expectations. Revenues edged up to $38.5 billion.
Cognizant's (CTSH) second quarter earnings beat estimates, while it revenues were in line with expectations. The company raised its earnings guidance for 2012.
AES (AES) reported second quarter earnings and revenues that trailed estimates, while it reaffirmed its 2012 adjusted earnings per share guidance, which surrounds the consensus estimate.
Chesapeake Energy (CHK), Goodrich Petroleum (GDP), Manitowoc (MTW), Plantronics (PLT), Power Integrations (POWI), THQ, Inc. (THQI), Time Warner Tcom (TWTC), Vornado Realty Trust (VNO) and WMS Industries (WMS) are among the companies due to release their quarterly results after the markets open.
The major Asian markets advanced strongly on the encouraging lead from Wall Street last Friday. The Japanese and the South Korean markets led the gainers in the region. Additional encouragement also came from a statement from the inspectors of the Troika that Greece has made progress in its spending cut program, which is essential for securing additional financing.
Japan's Nikkei 225 average closed up 171.18 points or 2 percent at 8,726. A majority of stocks advanced, with Asahi Glass, Isuzu Motors, Mazda Motors, Fuji Heavy Industries and Ricoh among the biggest gainers of the session.
Australia's All Ordinaries closed 49.90 points or 1.18 percent higher at 4,293, with material stocks leading the advance. Energy stocks also found buying interest. Meanwhile, Hong Kong's Hang Seng added 332.54 points or 1.69 percent before closing at 19,999.
On the economic front, inflation in Australia rose 0.2 percent in July from the previous month amid a rise in energy costs due to the imposition of the carbon tax from July 1, according to a survey by TD Securities and the Melbourne Institute.
The major European markets have moved into positive territory in late morning trading after a lackluster open.
In corporate news, luxury goods maker Richemont reported a 24 percent increase in its sales for the first four months of its fiscal year. The company said it expects first half profits to increase by 20-40 percent. U.K. low cost carrier easyJet reported an increase in its traffic and load factor for July.
On the economic front, U.K. house prices fell 0.6 percent month-over-month in July, according by a survey by Lloyds Banking Group's Halifax division. Prices were down 0.6 percent compared to the previous month.
Eurozone investor confidence declined for the fifth consecutive month in August to the lowest level in more than three years, according to data released by the Sentix Group. That said, the investor sentiment index fell a less than expected by 0.7 points to -30.3 in August. Economists had expected the index to drop to -31.
by RTT Staff Writer
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