U.S. Stock-Index Futures Advance; Newmont, Alcoa, JPMorgan Shares Climb
By Adam Haigh
Feb. 16 (Bloomberg) -- U.S. stock-index futures advanced, indicating the Standard & Poor’s 500 Index will extend last week’s first rally in five weeks, as commodity prices pushed raw-material stocks higher and Barclays Plc’s earnings topped estimates.
Newmont Mining Corp. and Alcoa Inc. both advanced more than 1 percent as metals rose. JPMorgan Chase & Co. and Citigroup Inc climbed in German trading after Barclays, the U.K.’s second- largest bank, beat analysts’ earnings forecasts.
Futures on the S&P 500 expiring in March gained 0.2 percent to 1,081 as of 7:23 a.m. in New York. Dow Jones Industrial Average futures climbed 0.1 percent to 10,128 and Nasdaq-100 Index futures rose 0.2 percent to 1,787.
“We are optimistic about the outlook for corporate profits,” said Cormac Weldon, the head of U.S. equities for Threadneedle Asset Management Ltd. in London, which manages the equivalent of about $95 billion. “We see the scope for asset allocation flows to favor equities as the recovery matures.”
The S&P 500 rose 0.9 percent last week, cutting its 2010 retreat to 3.6 percent, after European officials pledged to help Greece close its budget deficit and the U.S. economy gained momentum, overshadowing China’s actions to limit inflation. The measure has recouped about half of its declines since Feb. 4 when concern about growing budget gaps in Greece, Portugal and Spain spurred the biggest sell-off since April. U.S. markets were closed yesterday.
Earnings Slump
A record nine-quarter earnings slump is projected by analysts to have ended in the fourth quarter with an 80 percent increase in S&P 500 profits. Forty-five companies in the index are scheduled to release results this week, including Hewlett- Packard Co. and Wal-Mart Stores Inc. More than 350 companies in the S&P 500 have reported fourth-quarter earnings since Jan. 11, and about 76 percent have beaten analysts’ estimates, according to data compiled by Bloomberg.
A government report today may show manufacturing in New York state improved this month. The Empire Manufacturing report is due at 8:30 in New York. Private surveys have also signaled manufacturing is recovering. The Institute for Supply Management’s factory index in January showed the fastest pace of expansion since 2004.
Newmont Mining, the world’s second-largest gold producer by sales, climbed 2 percent to $47.44 in German trading. Alcoa gained 1.2 percent to $13.44.
JPMorgan, Oracle
JPMorgan rose 1 percent to $39.34, while Citigroup advanced 0.9 percent to $3.21 in Germany. Barclays jumped in London trading after saying 2009 profit more than doubled, lifted by investment banking and the sale of a fund management unit. The bank said net income rose to 9.39 billion pounds ($14.8 billion) from 4.38 billion pounds a year earlier. That beat the 8.78 billion-pound estimate of 14 analysts surveyed by Bloomberg.
Merck & Co., the maker of the Gardasil vaccine, posted fourth-quarter adjusted profit of 79 cents a share. That was more than the 78 cents average of analysts surveyed by Bloomberg. The shares rose 0.6 percent to $37.13.
Oracle Corp. may rise to $32 during the next 12 months as the purchase of Sun Microsystems Inc. boosts its revenue and earnings, Barron’s reported, citing Brendan Barnicle, an analyst at Pacific Crest Securities in Portland, Oregon. The shares gained 1.9 percent to $23.85 in Germany.
U.S. executives are boosting earnings estimates at the fastest rate in at least eight years just as optimism fades among analysts, a signal that preceded gains for the S&P 500 in the past.
Raising Forecasts
Companies from Kellogg Co. to McKesson Corp. pushed the number of U.S. companies raising forecasts to 10 percent this quarter, while 4.1 percent lowered them. The gap is the widest on record, according to data from Bespoke Investment Group LLC.
At the same time, analysts have cut first-quarter profit projections by 0.2 percent on average in the past month, data compiled by Bloomberg show. The last time companies were raising forecasts at a comparable rate while analysts reined them in was the start of 2004, when the S&P 500 gained 9 percent.
To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.
Last Updated: February 16, 2010 07:24 EST
_______________________________________________________
If you take anything I say as advice, you're crazier than I am.
