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Wall Street Picking Up Confidence In Run Up To Fed Meeting


After yesterday's lackluster showing, Wall Street seems to have regained its momentum, as indicated by the U.S. index futures, which point to a marginally higher opening on Tuesday. Asian stocks had a mixed session, while European stocks are seeing modest strength, as investors focused on some regional positives. The domestic markets now turn their attention to a consumer confidence reading and wait with hope that the Federal Reserve decides on running its quantitative easing program until the economy is up and running on a sustainable basis.

As of 6:15 pm ET, the Dow futures are rising 5 points, the S&P 500 Index futures are moving up 0.50 points and the Nasdaq 100 futures are gaining 4 points.

U.S. stocks went about in a lackluster manner on Monday, as traders preferred to stay on the sidelines ahead of several key catalysts.

On the economic front, the 2-day FOMC meeting is scheduled to begin, although the post-meeting policy statement would be released only on Wednesday.

The S&P Case-Shiller home price index for May is due to be released at 9 am ET. The 20-city composite house price index for May is expected to rise by a seasonally adjusted 1.3 percent month-over-month, while the unadjusted index may have risen 2 percent. The annual rate of the increase in the index is expected at 12.3 percent.

At 10 am ET, the Conference Board is scheduled to release its consumer confidence index for July. The consensus expectations call for a small drop in the index to 81 in July from 81.4 in June.

In corporate news, Pfizer (PFE) reported second quarter adjusted earnings that exceeded estimates, while its revenues were shy of estimates. The company affirmed its adjusted earnings per share and revenue guidance, which surrounded the consensus estimate.

Anadarko Petroleum (APC) reported better than expected second quarter earnings but its revenues were shy of estimates. NYSE Euronext (NYX) also reported better than expected second quarter results. Community Health Systems (CYH) reported second quarter results that trailed expectations. The company issued below consensus earnings guidance for its third quarter and lowered its guidance for the full year.

Amgen (AMGN), Arthur J. Gallagher (AJG), Big 5 Sports (BGFV), Century Aluminum (CENX), Digital River (DRIV), Extreme Networks (EXTR), Hanesbrands (HBI), Kimco Realty (KIM), Qiagen (QGEN), Renaissance Re (RNR), Symantec (SYMC) and Take-Two (TTWO) are among the companies due to release their quarterly results after the close of trading.

The major Asian markets closed on a mixed note, as sentiment remained cautious ahead of the U.S. FOMC meeting. The Japanese market rebounded strongly, with the yen's retreat coming in aid of the market. The averages in Taiwan and South Korea gained close to 1 percent, while the Australian, Indian, Indonesian and New Zealand markets retreated.

Japan's Nikkei 225 average ended up 208.69 points or 1.53 percent at 13,870. The market witnessed to broad based strength, with Tokyo Electric Power rallying 11.80 percent and leading the gains

Australia's All Ordinaries languished below the unchanged line for the better part of the session before closing down 1.60 points or 0.03 percent at 5,026. Hong Kong's Hang Seng Index closed at 21,954, down 103.81 points or 0.48 percent. China's Shanghai Composite closed 0.70 percent higher at 1,900.

On the economic front, a report released by Japan's Ministry of Economy, Trade and Industry showed that industrial output fell 3.3 percent month-over-month in June, steeper than the 1.5 percent drop expected by economists. A separate report showed that jobless rate fell 0.2 points to 3.9 percent in June, while economists expected an unemployment rate of 4 percent.

European stocks are seeing some strength, as traders digest mixed earnings and a better than expected German consumer confidence reading.

In corporate news, Infineon (IFX) reported higher third quarter revenue and also raised its sales guidance for the full year. Swiss investment bank UBS (UBS) reported a 32 percent increase in its second quarter profits. Meanwhile, Deutsche Bank reported a 49 percent drop in its second quarter profits. Barclays (BCS) reported a loss for its second quarter, hit by charges related to mis-selling.

Banco Santander's second quarter profits rose notably. BP (BP) reported lower second quarter profits, hurt by lower crude oil prices, with earnings trailing estimates by most analysts. French utility EDF's first half profits rose and the company raised its earnings forecast for the year. German industrial gas maker Linde reported higher profits for its first half. Peer Air Liquide also reported forecast beating results.

On the economic front, sentiment among German consumers is set to rise to its highest level in almost six years heading into August, the results of a survey by market research firm GfK revealed. The forward-looking consumer confidence index based on the index came in at 7 in August, up from 6.8 in July. A higher value was last recorded in September 2007, when the indicator was at 7.3. Economists had expected a more modest increase to 6.9.

Separately, survey data from the European Commission showed that the eurozone economic confidence index improved to 92.5 in July from 91.3 in the previous month, driven by improved confidence among consumers and managers in industry, services and retail trade.

by RTTNews Staff Writer

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