BL: .S. Stock-Index Futures Rise; Citigroup, Kraft, Newmont Gain
By Andreas Hippin
Oct. 31 (Bloomberg) -- U.S. stock-index futures climbed as investors bet the Federal Reserve will cut its benchmark lending rate today to boost economic growth.
``Everybody's waiting for the Fed decision,'' said Thomas Nagel, a trader at Equinet AG in Frankfurt. ``Expectations are extremely high.''
Citigroup Inc., Goldman Sachs Group Inc. and Merrill Lynch & Co. paced gains by interest-rate sensitive U.S. stocks in Europe. Kraft Foods Inc. rose after reporting third-quarter profit that beat analysts' estimates. Newmont Mining Corp., the world's second-largest gold producer, climbed before releasing earnings.
Standard & Poor's 500 Index futures expiring in December added 6 to 1,542 as of 11:10 a.m. in London. Dow Jones Industrial Average futures increased 39 to 13,861. Nasdaq-100 futures advanced 8.25 to 2,226.00.
U.S. stocks fell for the first time in three days yesterday on concern the economy is weakening after Procter & Gamble Co.'s profit forecast trailed analysts' estimates, consumer confidence dropped to the lowest since 2005 and home prices declined.
The central bank's policy-setting Federal Open Market Committee concludes a two-day meeting on interest rates and the economy. A decision on the benchmark lending rate is expected to be released around 2:15 p.m. Washington time.
``As long as nothing dramatic happens there will be enough liquidity to drive markets higher,'' said Guenther Gerstenberger, a fund manager at Oberursel, Germany-based PEH Wertpapier AG, which oversees the equivalent of $5.5 billion. ``U.S. stocks are cheap. Looking at the weak dollar this is the time to buy.''
Interest-Rate Bets
Fed-funds futures indicated a 94 percent chance that Chairman Ben S. Bernanke will reduce the target for overnight loans between banks by a quarter-percentage point to 4.5 percent. The dollar fell to a record low against the euro.
Citigroup, the biggest U.S. bank, advanced 23 cents to $42.34 in Germany. Goldman, the largest securities firm by market value, rose $1.64 to $241.97. Merrill, the world's biggest brokerage, added 48 cents to $66.04
Kraft Foods increased 21 cents to $32.82 in Frankfurt. The second-biggest food company reported third-quarter profit before some items of 44 cents a share, beating the 41-cent average of 14 estimates in a Bloomberg survey.
Newmont Mining climbed 29 cents to $46.73 in Germany. The company may report third-quarter profit before some items of 25 cents a share before U.S. exchanges open, according to the average of 13 analyst estimates compiled by Bloomberg.
Google, Chipotle
Google Inc. gained $6.49 to $701.26 in Germany. The owner of the world's most-popular Internet search machine is in talks with Verizon Communications Inc. and Sprint Nextel Corp. about developing mobile-phone software and services, two people familiar with the discussions said.
Verizon Wireless spokesman Jim Gerace confirmed the companies have talked, without commenting further. Sprint spokesman James Fisher and Google spokeswoman Erin Fors both declined to comment.
Chipotle Mexican Grill Inc. climbed $5.18 to $138.68 in Germany. The burrito chain McDonald's Corp. sold to the public in 2006 reported earnings of 62 cents a share in the third quarter. That topped the 54-cent average estimate from analysts in a Bloomberg survey.
MasterCard Inc., the second-biggest credit-card company, may report third-quarter profit before some items of $1.42 a share, according to the average of 14 estimates in a Bloomberg survey. The shares didn't trade in Europe.
Economic Reports
The U.S. economy cooled in the third quarter, restrained by a plunge in housing that threatens to bring the six-year expansion to a halt, economists said before a report today.
Gross domestic product probably rose at a 3.1 percent annual rate from July though September, according to the median estimate in a Bloomberg survey of economists, slowed from 3.8 percent in the previous quarter. Consumer spending, which accounts for more than two-thirds of the economy, probably expanded at a 3.2 percent pace, more than double the second quarter's growth rate.
The Fed's preferred inflation measure, which is tied to consumer spending and strips out food and energy costs, probably rose by 1.5 percent after increasing 1.4 percent in the previous period. The Commerce Department report is scheduled for release at 8:30 a.m. Washington time.
To contact the reporter on this story: Andreas Hippin in Frankfurt at ahippin@bloomberg.net .
Last Updated: October 31, 2007 07:12 EDT
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