U.S. Stock-Index Futures Advance as Facebook Gains
By Jonathan Morgan - May 2, 2013
U.S. stock futures advanced, indicating the Standard & Poor’s 500 Index will rebound from the biggest drop in two weeks, as investors awaited an interest-rate decision from the European Central Bank.
Facebook Inc. (FB) added 1.2 percent in pre-market trading as the operator of the world’s largest social network reported sales that topped projections. Sprint Nextel Corp. (S) fell 1.3 percent as Clearwire Corp., the unprofitable wireless-service provider majority owned by Sprint, said it needs at least $1.7 billion to cover a cash shortage.
S&P 500 (SPX) futures expiring in June advanced 0.2 percent to 1,580.4 at 11:07 a.m. in London. The equity gauge lost 0.9 percent yesterday as U.S. payrolls and manufacturing grew less than forecast, trimming this year’s rally to 11 percent. Contracts on the Dow Jones Industrial Average added 30 points, or 0.2 percent, to 14,666 today.
“The prospect of an ECB rate cut won’t do anything to harm sentiment, even if it is priced in,” Richard Hunter, head of equities at Hargreaves Lansdown Plc in London, said in a telephone interview today. “Company earnings have been reassuring in the first-quarter reporting season.”
Of the 358 companies in the S&P 500 that have reported so far, 73 percent exceeded analysts’ earnings predictions while 54 percent missed on sales, data compiled by Bloomberg show. Profit at S&P 500 companies rose 1.1 percent in the first three months of the year, according to estimates compiled by Bloomberg.
ECB Rates
The ECB will lower its benchmark interest rate by 25 basis points to a record low of 0.50 percent today, according to 44 of 70 economist forecasts in a Bloomberg survey. The bank will announce its decision at 1:45 p.m. in Bratislava, Slovakia, and ECB President Mario Draghi will hold a press conference 45 minutes later.
The Federal Reserve said yesterday it will keep buying bonds at a monthly pace of $85 billion while standing ready to raise or lower purchases as the economy changes.
A Labor Department release at 8:30 a.m. in Washington may show the number of people filing initial claims for jobless benefits climbed to 345,000 last week from 339,000, according to a Bloomberg survey of economists.
A report tomorrow is projected to show U.S. unemployment stayed at 7.6 percent in April, while payrolls rose 145,000, compared with an increase of 88,000 the prior month, according to the median estimates of economists in a Bloomberg survey.
Facebook advanced 1.2 percent to $27.75 in early New York trading. First-quarter sales surged 38 percent to $1.46 billion, a sign that Chief Executive Officer Mark Zuckerberg is making headway in a drive to make more money from mobile advertising. Profit excluding certain items was 12 cents a share, compared with an average analyst prediction of 13 cents.
Sprint Declines
Sprint Nextel slipped 1.3 percent to $6.97 in German trading as Clearwire said it needs $1.7 billion of funds through 2014 to continue operating. The deficit reflects “less certain revenues and high fixed costs,” Clearwire said. Clearwire didn’t trade in Europe today.
CommVault Systems Inc. (CVLT), a provider of data-storage software, increased 1.1 percent to $72.56 in Germany after Piper Jaffray Cos. upgraded the shares to overweight, the equivalent of a buy recommendation, from neutral.
To contact the reporter on this story: Jonathan Morgan in Frankfurt at jmorgan157@bloomberg.net
To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net
