Gains overseas, Cisco lift US stock futures.
US stock futures up despite sluggish retail sales, boosted by gains overseas, Cisco outlook
By Sara Lepro, AP Business Writer
On Thursday August 6, 2009, 8:29 am EDT
NEW YORK (AP) -- U.S. stock futures are edging higher Thursday, supported by gains in overseas markets and an encouraging outlook from Cisco Systems Inc.
The market's gains, however, were muted by sluggish July sales reports from retailers, as worries about job losses kept consumers from spending freely. Expectations had been low though, so the dips in sales didn't come as much of a surprise to the market.
In Europe, stocks rebounded after two days of losses after European central banks left their benchmark interest rates at low levels. The Bank of England also announced plans to expand its asset purchase program.
Meanwhile, Cisco Systems offered some fairly upbeat news, despite reporting a 46 percent drop in profit in its latest quarter late Wednesday. The technology giant, which narrowly beat expectations, said the quarter may have been the bottom of the recession-related downturn, noting positive trends in orders for its products.
The Labor Department is expected to announce before the market opens that the number of newly laid-off workers seeking unemployment benefits fell slightly last week, after rising more than expected in the previous week.
In the past two days, stocks have stalled from their big surge in July as investors become more cautious ahead of the government's crucial July employment report on Friday. The market soared higher last month on signs of improvement in industries such as housing and manufacturing, but investors are worried that rising unemployment and still-sagging consumer spending could seriously dampen the economy's recovery.
At the same time, analysts say some pause in buying is warranted after such a huge advance; The Dow Jones industrial average is up 13.9 percent in just 18 days.
Ahead of the market's open, Dow Jones industrial average futures were up 43, or 0.5 percent, at 9,288. Standard & Poor's 500 index futures were up 3.70, or 0.4 percent, at 1,004.50, while Nasdaq 100 index futures were down less than a point, or 0.02 percent, at 1,614.25.
In afternoon trading, Britain's FTSE 100 was up 1.2 percent, Germany's DAX index was up 0.8 percent, and France's CAC-40 was up 1.3 percent.
Earlier Thursday, Japan's Nikkei stock average rose 1.3 percent and Hong Kong's Hang Seng index jumped 2.0 percent.
A modest decline in stocks on Wednesday followed minimal gains on Tuesday. Those moves came after a surge on Monday that hurled the S&P 500 index above the 1,000 mark for the first time since November. Improving outlooks on manufacturing and housing have stoked the market's most recent advance.
Despite the growing caution in the market, analysts have been encouraged by the orderliness of the pause, noting that stocks have shown strength in their ability to hold on to most of their gains rather than selling off sharply. Analysts also say that the market's dips often present investors who may have missed out on the rally with good buying opportunities.
Bond prices were mostly higher in early trading. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.72 percent from 3.75 percent late Wednesday.
The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude fell 32 cents to $71.65 a barrel in electronic trading on the New York Mercantile Exchange.
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