Stock futures flat after China, German data

NEW YORK (Reuters) - Stock index futures were little changed Friday following economic data out of China and Germany, though the benchmark S&P index, near five-year highs, was on track for its first weekly drop of the year.

Data showed Chinese exports grew more than expected in January, while imports climbed 28.8 percent, highlighting robust domestic demand, while German data showed a 2012 surplus that was the nation's second highest in more than 60 years, an indication of the underlying strength of Europe's biggest economy.

Comments from European Central Bank President Mario Draghi about the strength of the euro Thursday kindled concern about the euro zone economy and sent U.S. equities lower.

U.S. economic data due out on Friday includes December international trade at 8:30 a.m. ET (1330 GMT) and wholesale inventories for December at 10:00 a.m. (1500 GMT).

Economists in a Reuters poll expect a trade deficit of $46.0 billion versus a $48.7 billion deficit in November while inventories are expected to be up 0.4 percent versus a 0.6 percent increase in November.

"Not enough to move the needle here and the norm of just about anything we put in front of investors this week," said Art Hogan, managing director of Lazard Capital Markets in New York.

The S&P 500 <.spx> has risen for five straight weeks and is up 5.8 percent for the year. Its advance was helped by legislators in Washington averting a series of automatic spending cuts and tax hikes earlier in the year, as well as better-than-expected corporate earnings and data that pointed to modest economic improvement but no immediate change in the Federal Reserve's stimulus plans.

The index, hovering near five-year highs, has found it tougher to climb in recent days as investors await strong trading incentives to drive it further upward.

"The market has gotten to a point where we are going to need a significant positive catalyst to take us through the next level of resistance, but the good news is we tested the new levels of support right around 1,504 on the S&P multiple times and we've held," said Hogan.

S&P 500 futures were unchanged and slightly below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 13 points, and Nasdaq 100 futures added 6 points.

LinkedIn Corp jumped 10.6 percent to $137.28 in premarket trading after announcing both blow-out quarterly profits and a bullish forecast for the new year that exceeded Wall Street's already lofty expectations.

According to Thomson Reuters data through Thursday morning, of 317 companies in the S&P 500 that have reported earnings, 69 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters.

Fourth-quarter earnings for S&P 500 companies grew 5 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

European shares rose, recovering from a fall the previous session, as strong Chinese data boosted hopes that the global economy will strengthen and fuel demand for equities.<.eu/>

Asian shares also rose after China's data set the scene for economic recovery, although investors opted to book profit ahead of the Chinese new year holidays next week, limiting gains.

(Editing by Bernadette Baum)

Read More..

Stock index futures cut gains following jobless claims data

By Anne Laurent: A 9-year-old Mexican girl, under the reported name of Dafne, gave birth to a baby girl on Jan. 27, 2013 in Jalisco, Mexico. Both mother and child are at home and healthy, Dr. Enrique Rabago, director of Zapopan Hospital, said at a...

Read More..

Stock futures dip after Tuesday rally, earnings in focus

NEW YORK (Reuters) - Stock index futures dipped on Wednesday, indicating the S&P 500 may pull back from a rally of more than 1 percent a day earlier as the index struggles to push past 5-year highs.

Walt Disney Co beat estimates for quarterly adjusted earnings and said it expected the next few quarters to be better, with a stronger lineup of movies and rising attendance at its theme parks. Shares advanced 3.2 percent to $56.03 in light premarket trading.

With the benchmark S&P 500 index at its highest since December 2007, investors are finding it a challenge to continue a move upward amid a dearth of fresh trading incentives, analysts said.

"We are a little bit at stall speed," said Keith Bliss, senior vice-president at Cuttone & Co in New York.

"We will continue to see earnings but it wouldn't surprise me a bit to see us consolidate around this level on the S&P 500 for the next day or two, in the absence of some real compelling news, which is always a risk."

According to Thomson Reuters data through Tuesday morning, of 278 companies in the S&P 500 <.spx> that have reported earnings, 68.7 percent have beat analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters.

In another positive sign for corporate profits, 66 percent of companies have topped revenue forecasts. Fourth-quarter earnings for S&P 500 companies are now expected to rise 4.5 percent, according to the data, above the 1.9 percent forecast at the start of earnings season.

S&P 500 futures fell 4.4 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 30 points, and Nasdaq 100 futures declined 11.5 points.

The benchmark S&P index rose 1.04 percent Tuesday, its biggest percentage gain since a 2.5-percent advance on January 2, when legislators sidestepped a "fiscal cliff" of spending cuts and tax hikes that could have hurt a fragile U.S. economic recovery.

Visa , the world's largest credit and debit card network, is expected to report earnings per share of $1.79 for its first quarter, up from $1.49 a year earlier. Smaller rival MasterCard recently reported better-than-expected results but said its revenue growth could slow in the first half of the year due to economic uncertainty.

Zynga Inc jumped 4.7 percent to $2.87 in premarket trading after the online gaming company reported an unexpected fourth-quarter profit, following steep cost cuts and shifting forward deferred revenue.

Time Warner Inc gained 3.1 percent to $51.50 before the bell after reporting higher fourth-quarter profit that beat Wall Street estimates, as growth in its cable networks offset declines in its film, TV entertainment and publishing units.

European stocks were mixed at midday as the previous session's tentative recovery lost steam, with euro zone banks sliding on renewed concerns over the health of the region's economy. <.eu/>

Asian shares rose, with Japanese equities climbing to their highest since October 2008 on hopes of central bank monetary policy easing and optimism about the prospects for a global economic recovery.

(Editing by Bernadette Baum)

Read More..

Stock futures indicate rebound from recent sell-off

NEW YORK (Reuters) - Stock index futures advanced on Tuesday retracing ground lost the prior day, indicating that Wall Street would rebound off its worst daily session since November.

Major averages dropped about 1 percent on Monday, pressured by renewed worries over the euro zone's sovereign debt crisis. While the day's decline pushed the S&P 500 into negative territory for February, equities have been strong performers of late, and the benchmark index is up 4.9 percent for 2013.

Wall Street has advanced on strong fourth-quarter earnings and signs of improved economic growth, suggesting the market's longer-term trend remains higher.

"Markets may have been slightly ahead of themselves, but investors recognize that earnings and data are both more positive than we previously thought, so no one should worry that yesterday was the start of anything bigger," said Oliver Purshe, president of Gary Goldberg Financial Services in Suffern, New York.

Archer Daniels Midland , Walt Disney Co and Kellogg Co are among the companies on tap to report on Tuesday. According to Thomson Reuters data, of the 256 S&P 500 companies that have reported earnings thus far, 68.4 percent have beaten profit expectations, compared with the 62 percent average since 1994 and the 65 percent average over the past four quarters.

Fourth-quarter earnings for S&P 500 companies are expected to rise 4.4 percent, according to the data. That estimate is above the 1.9 percent forecast at the start of earnings season, but well below the 9.9 percent forecast on October 1.

S&P 500 futures rose 7.2 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 69 points and Nasdaq 100 futures rose 11.5 points.

At current levels, the S&P is about 5.4 percent away from its all-time intraday high of 1,576.09, reached in October 2011.

Investors will also be looking to the Institute for Supply Management's January non-manufacturing index, due at 10 a.m. Economists forecast a reading of 55.2, versus 55.7 in December.

Last week, the ISM's manufacturing index for January showed the pace of growth in manufacturing picked up to its highest level in nine months.

In company news, McGraw-Hill will be in focus a day after news the U.S. Justice Department plans to sue the company's Standard & Poor's unit over its mortgage bond ratings. The action would mark the first such federal action against a credit rating agency related to the recent financial crisis.

The stock plummeted almost 14 percent in Monday's session, its worst daily losses since the October 1987 market crash.

U.S. shares of BP Plc rose 1.9 percent to $44.49 before the bell after the company reported earnings that beat expectations and said underlying financial momentum would be "strongly evident" by 2014.

Dell Inc may also be volatile as the company moved closer to a nearly $24 billion buyout deal to take the company private. The stock rose 1.1 percent to $13.42 in light premarket trading.

U.S. stocks slid on Monday as worries about Europe caused the market to pull back from recent gains.

(Editing by Theodore d'Afflisio)

Read More..

Stock futures dip after 5-year highs with data, earnings due

NEW YORK (Reuters) - U.S. stock index futures slipped on Monday after the S&P 500 hit a five-year high and the Dow rose above 14,000 last week as investors waited for factory orders data and another round of corporate earnings.

The benchmark S&P index <.spx> is up more than 6 percent for the year, with nearly half of the gains coming in the session after U.S. legislators successfully sidestepped the "fiscal cliff" of tax increases and spending cuts which threatened to derail the economic recovery.

The gains have left the index roughly 60 points away from its all-time intraday high of 1,576.09.

"We are coming off an economic data hangover from Friday and the market was on a bullish spree. This is an opportunity for investors to take advantage of the bull run," said Andre Bakhos, director of market analytics at Lek Securities in New York.

The Dow's march above 14,000 was the highest October 2007.

"With an early year run of better than 6 percent, investors are already behind in performance and pullbacks should be shallow and well contained, giving the underweighted investors the opportunity to move into equities."

Investors will look to December factory orders data for signs of economic improvement. Economists in a Reuters survey expect a rise of 2.2 percent compared with an unchanged reading in December.

Economic data has pointed to a modest U.S. recovery, but the data has not been strong enough to upset investor expectations the Federal Reserve will continue its stimulus policy that has buoyed stocks.

Earnings are due from a number of companies including Anadarko Petroleum Corp ; Yum! Brands Inc , owner of fast-food chains, and household products company Clorox .

S&P 500 futures fell 4.4 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 30 points, and Nasdaq 100 futures shed 7.75 points.

According to Thomson Reuters data, of the 239 companies in the S&P 500 that have reported earnings through Friday, 68 percent have reported earnings above analyst expectations compared with the 62 percent average since 1994 and the 65 percent average over the past four quarters.

S&P 500 fourth-quarter earnings are expected to rise 3.8 percent, according to the data. That estimate is above the 1.9 percent forecast at the start of earnings season, but well below the 9.9 percent fourth-quarter earnings forecast on October 1.

Japan Airlines Co Ltd said it will talk to Boeing Co about compensation for the grounding of the 787 Dreamliner, adding that the idling of its jets would cost it nearly $8 million from its earnings through to the end of March.

Chevron Corp dipped 0.9 percent to $115.47 in premarket trade after UBS cut its rating on the Dow component to "neutral.

European shares dipped by midday as a near-term risk of a technical sell-off and political uncertainty in the euro zone prompted a bout of profit taking with indexes hovering near multiyear highs. <.eu/>

Asian shares climbed to 18-month highs after U.S. data showed some promise of a credible recovery but not strong enough to threaten the Federal Reserve's easing plans, while momentum also gained on firmer manufacturing data from Europe and China.

(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama and Kenneth Barry)

Read More..

"Great Rotation"- A Wall Street fairy tale?

NEW YORK (Reuters) - Wall Street's current jubilant narrative is that a rush into stocks by small investors has sparked a "great rotation" out of bonds and into equities that will power the bull market to new heights.

That sounds good, but there's a snag: The evidence for this is a few weeks of bullish fund flows that are hardly unusual for January.

Late-stage bull markets are typically marked by an influx of small investors coming late to the party - such as when your waiter starts giving you stock tips. For that to happen you need a good story. The "great rotation," with its monumental tone, is the perfect narrative to make you feel like you're missing out.

Even if something approaching a "great rotation" has begun, it is not necessarily bullish for markets. Those who think they are coming early to the party may actually be arriving late.

Investors pumped $20.7 billion into stocks in the first four weeks of the year, the strongest four-week run since April 2000, according to Lipper. But that pales in comparison with the $410 billion yanked from those funds since the start of 2008.

"I'm not sure you want to take a couple of weeks and extrapolate it into whatever trend you want," said Tobias Levkovich, chief U.S. equity strategist at Citigroup. "We have had instances where equity flows have picked up in the last two, three, four years when markets have picked up. They've generally not been signals of a continuation of that trend."

The S&P 500 rose 5 percent in January, its best month since October 2011 and its best January since 1997, driving speculation that retail investors were flooding back into the stock market.

Heading into another busy week of earnings, the equity market is knocking on the door of all-time highs due to positive sentiment in stocks, and that can't be ignored entirely. The Standard & Poor's 500 Index <.spx> ended the week about 4 percent from an all-time high touched in October 2007.

Next week will bring results from insurers Allstate and The Hartford , as well as from Walt Disney , Coca-Cola Enterprises and Visa .

But a comparison of flows in January, a seasonal strong month for the stock market, shows that this January, while strong, is not that unusual. In January 2011 investors moved $23.9 billion into stock funds and $28.6 billion in 2006, but neither foreshadowed massive inflows the rest of that year. Furthermore, in 2006 the market gained more than 13 percent while in 2011 it was flat.

Strong inflows in January can happen for a number of reasons. There were a lot of special dividends issued in December that need reinvesting, and some of the funds raised in December tax-selling also find their way back into the market.

During the height of the tech bubble in 2000, when retail investors were really embracing stocks, a staggering $42.7 billion flowed into equities in January of that year, double the amount that flowed in this January. That didn't end well, as stocks peaked in March of that year before dropping over the next two-plus years.

MOM AND POP STILL WARY

Arguing against a 'great rotation' is not necessarily a bearish argument against stocks. The stock market has done well since the crisis. Despite the huge outflows, the S&P 500 has risen more than 120 percent since March 2009 on a slowly improving economy and corporate earnings.

This earnings season, a majority of S&P 500 companies are beating earnings forecast. That's also the case for revenue, which is a departure from the previous two reporting periods where less than 50 percent of companies beat revenue expectations, according to Thomson Reuters data.

Meanwhile, those on the front lines say mom and pop investors are still wary of equities after the financial crisis.

"A lot of people I talk to are very reluctant to make an emotional commitment to the stock market and regardless of income activity in January, I think that's still the case," said David Joy, chief market strategist at Columbia Management Advisors in Boston, where he helps oversee $571 billion.

Joy, speaking from a conference in Phoenix, says most of the people asking him about the "great rotation" are fund management industry insiders who are interested in the extra business a flood of stock investors would bring.

He also pointed out that flows into bond funds were positive in the month of January, hardly an indication of a rotation.

Citi's Levkovich also argues that bond investors are unlikely to give up a 30-year rally in bonds so quickly. He said stocks only began to see consistent outflows 26 months after the tech bubble burst in March 2000. By that reading it could be another year before a serious rotation begins.

On top of that, substantial flows continue to make their way into bonds, even if it isn't low-yielding government debt. January 2013 was the second best January on record for the issuance of U.S. high-grade debt, with $111.725 billion issued during the month, according to International Finance Review.

Bill Gross, who runs the $285 billion Pimco Total Return Fund, the world's largest bond fund, commented on Twitter on Thursday that "January flows at Pimco show few signs of bond/stock rotation," adding that cash and money markets may be the source of inflows into stocks.

Indeed, the evidence suggests some of the money that went into stock funds in January came from money markets after a period in December when investors, worried about the budget uncertainty in Washington, started parking money in late 2012.

Data from iMoneyNet shows investors placed $123 billion in money market funds in the last two months of the year. In two weeks in January investors withdrew $31.45 billion of that, the most since March 2012. But later in the month money actually started flowing back.

(Additional reporting by Caroline Valetkevitch; Editing by Kenneth Barry)

Read More..

"Great Rotation"- A Wall Street fairy tale?

NEW YORK (Reuters) - Wall Street's current jubilant narrative is that a rush into stocks by small investors has sparked a "great rotation" out of bonds and into equities that will power the bull market to new heights.

That sounds good, but there's a snag: The evidence for this is a few weeks of bullish fund flows that are hardly unusual for January.

Late-stage bull markets are typically marked by an influx of small investors coming late to the party - such as when your waiter starts giving you stock tips. For that to happen you need a good story. The "great rotation," with its monumental tone, is the perfect narrative to make you feel like you're missing out.

Even if something approaching a "great rotation" has begun, it is not necessarily bullish for markets. Those who think they are coming early to the party may actually be arriving late.

Investors pumped $20.7 billion into stocks in the first four weeks of the year, the strongest four-week run since April 2000, according to Lipper. But that pales in comparison with the $410 billion yanked from those funds since the start of 2008.

"I'm not sure you want to take a couple of weeks and extrapolate it into whatever trend you want," said Tobias Levkovich, chief U.S. equity strategist at Citigroup. "We have had instances where equity flows have picked up in the last two, three, four years when markets have picked up. They've generally not been signals of a continuation of that trend."

The S&P 500 rose 5 percent in January, its best month since October 2011 and its best January since 1997, driving speculation that retail investors were flooding back into the stock market.

Heading into another busy week of earnings, the equity market is knocking on the door of all-time highs due to positive sentiment in stocks, and that can't be ignored entirely. The Standard & Poor's 500 Index <.spx> ended the week about 4 percent from an all-time high touched in October 2007.

Next week will bring results from insurers Allstate and The Hartford , as well as from Walt Disney , Coca-Cola Enterprises and Visa .

But a comparison of flows in January, a seasonal strong month for the stock market, shows that this January, while strong, is not that unusual. In January 2011 investors moved $23.9 billion into stock funds and $28.6 billion in 2006, but neither foreshadowed massive inflows the rest of that year. Furthermore, in 2006 the market gained more than 13 percent while in 2011 it was flat.

Strong inflows in January can happen for a number of reasons. There were a lot of special dividends issued in December that need reinvesting, and some of the funds raised in December tax-selling also find their way back into the market.

During the height of the tech bubble in 2000, when retail investors were really embracing stocks, a staggering $42.7 billion flowed into equities in January of that year, double the amount that flowed in this January. That didn't end well, as stocks peaked in March of that year before dropping over the next two-plus years.

MOM AND POP STILL WARY

Arguing against a 'great rotation' is not necessarily a bearish argument against stocks. The stock market has done well since the crisis. Despite the huge outflows, the S&P 500 has risen more than 120 percent since March 2009 on a slowly improving economy and corporate earnings.

This earnings season, a majority of S&P 500 companies are beating earnings forecast. That's also the case for revenue, which is a departure from the previous two reporting periods where less than 50 percent of companies beat revenue expectations, according to Thomson Reuters data.

Meanwhile, those on the front lines say mom and pop investors are still wary of equities after the financial crisis.

"A lot of people I talk to are very reluctant to make an emotional commitment to the stock market and regardless of income activity in January, I think that's still the case," said David Joy, chief market strategist at Columbia Management Advisors in Boston, where he helps oversee $571 billion.

Joy, speaking from a conference in Phoenix, says most of the people asking him about the "great rotation" are fund management industry insiders who are interested in the extra business a flood of stock investors would bring.

He also pointed out that flows into bond funds were positive in the month of January, hardly an indication of a rotation.

Citi's Levkovich also argues that bond investors are unlikely to give up a 30-year rally in bonds so quickly. He said stocks only began to see consistent outflows 26 months after the tech bubble burst in March 2000. By that reading it could be another year before a serious rotation begins.

On top of that, substantial flows continue to make their way into bonds, even if it isn't low-yielding government debt. January 2013 was the second best January on record for the issuance of U.S. high-grade debt, with $111.725 billion issued during the month, according to International Finance Review.

Bill Gross, who runs the $285 billion Pimco Total Return Fund, the world's largest bond fund, commented on Twitter on Thursday that "January flows at Pimco show few signs of bond/stock rotation," adding that cash and money markets may be the source of inflows into stocks.

Indeed, the evidence suggests some of the money that went into stock funds in January came from money markets after a period in December when investors, worried about the budget uncertainty in Washington, started parking money in late 2012.

Data from iMoneyNet shows investors placed $123 billion in money market funds in the last two months of the year. In two weeks in January investors withdrew $31.45 billion of that, the most since March 2012. But later in the month money actually started flowing back.

(Additional reporting by Caroline Valetkevitch; Editing by Kenneth Barry)

Read More..

Global shares gain, dollar dips as growth outlook brightens

LONDON (Reuters) - The dollar fell and world stocks gained on Friday as fresh economic data signaled that the euro zone's downturn has eased and China's growth was on track, but moves were limited as investors await a U.S. jobs report.

American employers are expected to have added 160,000 new jobs to their payrolls in January, a marginal rise on December's 155,000 gain, and a stronger number could knock the safe-haven dollar further as it would signal a strengthening recovery.

U.S. stock index futures pointed to a higher open on Wall Street on Friday <.n>, reflecting the hopes for jobs growth, while the dollar languished at a 3-1/2 month low against a basket of currencies <.dxy>.

MSCI's world equity index <.miwd00000pus> added 0.5 percent to stay close to its best level since May 2011.

Earlier, shares moved higher across Europe when euro zone factories recorded their best month in nearly a year during January although remaining mired in recession, according to the Markit Purchasing Managers' Index (PMI).

"Providing there are no further setbacks to the region's debt crisis, these data add to the expectation that the euro zone is on course to return to growth by mid-2013," said Chris Williamson, chief economist at data compiler Markit.

The euro hit a high of $1.3657 after the data came out, its highest level since November 2011, before settling to show a gain of 0.5 percent at $1.3643.

The common currency also hit a 33-month high against the yen, rising more than 1 percent to 125.96 yen.

The pan-European FTSEurofirst 300 index <.fteu3> extended its recent gains by 0.2 percent to 1,166.67 points, near a 23-month high after solid rally since the start of the year. London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were up between 0.5 and 0.8 percent.

Earlier, China's official PMI for January eased to 50.4, but held above the 50 mark which separates expansion from contraction, while a separate private survey showed growth in the manufacturing sector had hit a two-year high, underlining hopes the nation's economic recovery is slowly gaining momentum.

The mixed reading left MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> little changed.

A report from the Institute for Supply Management, due out at 10 a.m. ET, is likely to show that American factories joined in the modest global expansion in January.

EURO STRENGTH

Both the euro and European stocks trimmed some of their gains when the European Central Bank said the region's banks would return only 3.5 billion euros ($4.75 billion) of its emergency 3-year loans in a second repayment window next week.

The banks, which borrowed over one trillion euros of the cheap money at the height of the euro zone crisis, have another two years to pay it back if they want but took the opportunity this week to return a surprisingly large amount of the loans.

The quicker-than-expected repayments have triggered a rise in money market interest rates , effectively tightening monetary conditions, and rates could keep climbing if the money continues to drain from the system.

For Europe's struggling countries and the ECB this is not an ideal situation, effectively tightening monetary policy and creating unwanted stress just as economies are showing fragile signs of improvement.

It also comes as the Federal Reserve is undertaking a massive monetary stimulus in the United States and the Bank of Japan has come under strong pressure from the new government in Tokyo to add liquidity to boost its economy.

"The perception is that the ECB is being less supportive and is not providing as much liquidity as the other central banks are," said Andrew Milligan, head of Global Strategy at Standard Life Investments.

The approach of the U.S. jobs report was limiting moves in commodity markets which were generally supported by the rising confidence in the outlook for global growth.

Gold was up 0.2 percent at $1,665.91 an ounce, silver was up 0.1 percent at $31.43 an ounce and three month copper on the London Metal Exchange rose to $8,199 a tonne, up 0.4 percent.

Iron ore, which is particularly sensitive to economic growth, climbed to its highest level in more than two weeks to around $152.50 a tonne <.io62-cni> .

"The impression is that things are improving slowly on the macroeconomic front. The data seems to be moving in the right direction and we have had more positive surprises than negative surprises," said Robin Bhar, a metals analyst at Societe Generale.

In the oil market the rising economic optimism coupled with tension across the Middle East, the world's biggest oil producing region, has put Brent crude on track to its biggest weekly gain in two months, while U.S. crude is set to rise for an eighth straight week.

Brent oil was up 33 cents to $115.88, although U.S. crude futures slipped 27 cents to $97.22 a barrel.

(Additional reporting by Marc Jones,; editing by David Stamp)

Read More..

Stock futures flat as earnings roll in; data on tap

NEW YORK (Reuters) - Stock futures were little changed on Thursday ahead of data on the labor market and a slew of corporate earnings reports.

Facebook Inc shares lost 4.6 percent to $29.83 in premarket trading. The company doubled its mobile advertising revenue in the fourth quarter but that growth trailed some of Wall Street's most aggressive estimates.

Qualcomm Inc gained 6.3 percent to $67.55 in premarket trading after the world's leading supplier of chips for cellphones beat analysts' expectations for quarterly profit and revenue and raised its financial targets for 2013.

Investors will look to weekly initial jobless claims data at 8:30 a.m. ET (1330 GMT) for clues on the health of the labor market ahead of the payrolls report on Friday. Economists in a Reuters survey forecast a total of 350,000 new filings compared with 330,000 in the prior week.

The S&P 500 <.spx> is up 5.3 percent for the month, as legislators in Washington temporarily sidestepped a "fiscal cliff" of automatic tax increases and spending cuts that could have derailed the economic recovery, and amid improving economic data and better-than-expected corporate earnings.

But the benchmark index has stalled recently and is virtually flat for the week, hovering near the 1,500 mark, as investors look for more catalysts to justify further gains.

"We've got a handful of economic data today that might move the needle for the market and we've got plenty to contemplate as we continue to get through a plethora of earnings reports as well, so I'm not surprised to see us sideways," said Art Hogan, managing director of Lazard Capital Markets in New York.

"Whether you look at the fears over sequestration (broad government spending cuts set to take effect March 1) which is next month's business, or you consider the jackrabbit start to the year that is not sustainable, or you start to contemplate the weak patches in the economic data stream that we have seen in pieces - all of that combines for a wall of worry for this market to climb and it's building."

Also at 8:30 a.m. (1330 GMT), the Commerce Department will release December personal income and spending data; economists expect a 0.8 percent rise in income and a 0.3 percent increase in spending.

United Parcel Service Inc lost 2.1 percent to $79.49 in premarket trading after the world's largest parcel delivery company reported a net loss in the fourth quarter after a $3 billion one-time charge from pension accounting, and forecast that 2013 earnings would rise 6 percent to 12 percent.

Later in the session at 9:45 a.m. (1445 GMT), the Institute for Supply Management Chicago releases January index of manufacturing activity. Economists in a Reuters survey forecast a reading of 50.5 compared with 50.0 in December.

S&P 500 futures fell 0.5 point and were slightly below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 5 points, and Nasdaq 100 futures lost 7 points.

Thomson Reuters data through Wednesday morning shows that of the 192 companies in the S&P 500 that have reported earnings this season, 68.8 percent have exceeded expectations, a higher proportion than over the past four quarters and above the average since 1994.

Overall, S&P 500 fourth-quarter earnings are forecast to have risen 3.8 percent. That's above the 1.9 percent forecast from the start of the earnings season, but well below a 9.9 percent fourth-quarter earnings growth forecast on October 1, the data showed.

WMS Industries Inc surged 56.2 percent to $25.57 in premarket after the company agreed to be acquired by Scientific Games Corp for $26 per share in cash. Scientific Games advanced 1.8 percent to $9.09.

(Editing by Bernadette Baum)

Read More..

Stock futures point to lower open after weak GDP read

NEW YORK (Reuters) - Stock index futures pointed to a slightly weaker open on Wednesday following an unexpected contraction in fourth-quarter economic activity.

The first read showed gross domestic product fell 0.1 percent, far below expectations for growth of 1.1 percent. However, a read on private sector employment topped forecasts, with the ADP National Employment report showing 192,000 jobs added in January, higher than the 165,000 expectation.

Futures dipped modestly following the GDP data; previously, they had indicated a flat open for equity markets, which have surged in recent sessions.

"This is one chink in the armor of the recent better-than-expected economic indicators. This will make people start to get wary," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York. "If it turns out Sandy and the fiscal cliff were the reasons for (the contraction), people will shrug it off."

Deeper losses were prevented by a rise in both Boeing Co and Amazon.com Inc , which rallied after earnings, continuing a trend this quarter of high-profile names advancing after results.

Amazon.com Inc rose 8.8 percent to $283.30 in premarket trading a day after reporting better-than-expected fourth-quarter earnings and strong revenue growth. The rally put the stock within striking distance of an all-time high.

Boeing Co rose 1.3 percent to $74.60 before the bell after reporting adjusted fourth-quarter earnings that beat expectations. The Dow component also said that while production continued on its Dreamliner jet, which has had technical problems recently, it was suspending delivery until clearance was granted by the Federal Aviation Administration.

Thomson Reuters data showed that of the 174 companies in the S&P 500 that have reported earnings this season, 68.4 percent have been above analyst expectations, which is a higher proportion than over the past four quarters and above the average since 1994.

S&P 500 futures fell 2.6 point and were about even with fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 18 points and Nasdaq 100 futures fell 3.25 points.

The S&P 500 has risen for nine of the past 10 sessions, putting it above 1,500, a level market technicians call an inflection point that will determine the overall direction in the near term. The benchmark index is on track to post its best monthly performance since October 2011 as investors poured $55 billion in new cash into stock mutual funds and exchange-traded funds in January, the biggest monthly inflow on record.

The Dow Jones industrial average has been flirting with 14,000, a level it hasn't seen since October 2007. Many analysts have said markets may need to take a pause at current levels.

The Federal Reserve concludes a two-day meeting on Wednesday, and while the central bank is expected to keep monetary policy on a steady path, intensive debates continue behind the scenes over when the controversial bond-buying program should be curtailed.

In company news, Chesapeake Energy Corp rose 10.5 percent to $20.95 in premarket trading a day after saying Aubrey McClendon would step down as chief executive after a year in which a series of Reuters investigations triggered civil and criminal probes of the second-largest U.S. natural gas producer.

U.S. stocks advanced on Tuesday, led by defensive sectors, in a sign the cash piles recently moving into the market are being put to use by cautious investors to pick up more gains.

(Editing by Chizu Nomiyama and Nick Zieminski)

Read More..

Stock futures lower; Ford volatile in premarket

NEW YORK (Reuters) - Stock index futures edged lower on Tuesday as investors took profits following an extended rally and waited for earnings and data on consumer confidence and housing.

Equities have been on a tear lately, with the S&P 500 ending an eight-day streak of gains in Monday's session. The index remained above 1,500, suggesting there was still support for a market that has been hovering around five-year highs.

"We need to slow down and digest the huge move we've had, so it makes sense futures are weak this morning, though it is also encouraging that we're still strong enough to stay above 1,500," said Christian Wagner, chief executive officer at Longview Capital Management in Wilmington, Delaware.

The gains have largely come on a strong start to earnings season and that trend continued on Tuesday, with positive results from both Ford Motor Co and Pfizer Inc .

Pfizer, a Dow component, posted fourth-quarter earnings that topped expectations, sending shares up 0.6 percent to $26.95. Eli Lilly and Co , a peer pharmaceutical company, rose 1.6 percent to $53.50 after it also reported adjusted fourth-quarter earnings and revenue that beat expectations.

Ford also posted earnings that topped consensus views, but the stock was volatile in premarket trading fluctuating from rise to loss. The second-largest car company forecast a wider loss in its European segment because of weakness in that region. After climbing more than 4 percent before the bell, it turned lower to fall 2 percent to $13.50.

"We've had some cross-currents on earnings, with both strength and weakness, and that's another reason we need some affirmation the upside will continue from here," said Wagner.

Yahoo Inc rose 1.9 percent to $20.70 in premarket trading a day after reporting adjusted earnings that beat expectations and forecasting a rise in annual revenue.

Thomson Reuters data showed that of the 150 companies in the S&P 500 that have reported earnings so far, 67.3 percent have beaten analysts' expectations, which is a higher proportion than over the past four quarters and above the average since 1994.

S&P 500 futures fell 5.2 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 30 points and Nasdaq 100 futures slid 9.5 points.

The Federal Reserve's Open Market Committee begins two days of meetings on interest rates. Traders speculated more solid U.S. growth indicators might see the Fed pull back on its aggressive easing stimulus, which has played a key role in fuelling an equity market rally since the second half of last year.

In a sign of the improved view towards equities, investors poured $55 billion in new cash into stock mutual funds and exchange-traded funds in January, the biggest monthly inflow on record, research provider TrimTabs Investment Research said.

Still, market participants will look to the latest economic data for evidence the recent rally was justified.

January consumer confidence, due at 10 a.m. (1500 GMT) is seen dipping to 64 from 65.1 in the previous month. The S&P Case/Shiller Home Price Index for November is seen showing an increase of 0.6 percent in home prices. Case/Shiller is due at 9 a.m.

While the housing market has recently shown signs of improvement, data released on Monday showed pending home sales unexpectedly slumped in December.

U.S. stocks edged modestly lower on Monday. However, Caterpillar Inc rallied after results, limiting losses in the Dow, while a rebound in shares of Apple Inc kept the Nasdaq in positive territory.

(Editing by Kenneth Barry)

Read More..

Stock futures tick up after durable goods data

NEW YORK (Reuters) - Stock index futures pointed to a modestly higher open on Monday following strong data and results from Caterpillar, though gains were slight after a rally that took the S&P 500 above 1,500 for the first time in more than five years.

A strong start to the earnings season has boosted equities, with major averages rising for four straight weeks. The S&P has gained for eight straight days, its longest winning streak in eight years.

Caterpillar Inc rose 2.5 percent to $98 in premarket trading after the Dow component reported adjusted fourth-quarter earnings that beat expectations, though revenue was slightly below forecasts. The heavy machinery maker also said it remained cautious on the economy despite recent improvements.

"You can't find more of a global bellwhether than Cat, and people are pleased with the number, which suggests there could be less concern about slowing growth in China after this," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York.

Thomson Reuters data through Friday showed that of the 147 S&P 500 companies that have reported earnings so far, 68 percent exceeded expectations. Since 1994, 62 percent of companies have topped expectations, while the average over the past four quarters stands at 65 percent.

Yahoo Inc reports after the closing bell, and could face heightened expectations following strong results at Google Inc last week.

S&P 500 futures rose 2 points and were about even with fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 22 points and Nasdaq 100 futures rose 2 points.

The S&P 500 closed at its highest since December 10, 2007, and the Dow ended at its highest since October 31, 2007. Over the past four weeks, the S&P has jumped 7.2 percent, suggesting markets may be vulnerable to a pullback if news disappoints.

Durable goods jumped 4.6 percent in December, a pace that far outstripped expectations for a rise of 1.8 percent.

"We continue to have a parade of better-than-expected economic reports. All-in-all it's a good picture. I think there's a good chance we've reached a point of recognition where people don't think the economy will crater," Kaufman said.

In addition to earnings, equities have also risen on an agreement in Washington to extend the government's borrowing power. On Monday, Fitch Ratings said that agreement removed the near-term risk to the country's 'AAA' rating.

Previously, the agency said the lack of an agreement would prompt a review of the sovereign rating.

In company news, Keryx Biopharmaceuticals Inc said a late-stage trial of its experimental kidney disease drug met the main study goal of reducing phosphate levels in blood, sending shares up 41 percent to $4.84 in premarket trading.

Bargain hunters may look to Apple Inc in the first session after the tech giant lost its coveted title as the largest U.S. company by market capitalization to Exxon Mobil Corp . On Friday, Apple's market cap fell to $413 billion, down roughly $250 billion from its September peak. Apple's fall is about equal to the entire value of Google Inc .

"Apple is pretty attractive right now, so you may see an opportunity here," said Chris Bertelsen, who helps oversee $1.5 billion as chief investment officer of Global Financial Private Capital in Sarasota, Florida. "Those who think the stock is dead have made a big mistake."

U.S. stocks rose on Friday, lifted by strong results from such companies as Procter & Gamble . The rise put the S&P 500 about 4.1 percent away from its all-time closing high of 1,565.15 on October 9, 2007.

(Editing by W Simon and Kenneth Barry)

Read More..

Wall Street Week Ahead: Bears hibernate as stocks near record highs

NEW YORK (Reuters) - Stocks have been on a tear in January, moving major indexes within striking distance of all-time highs. The bearish case is a difficult one to make right now.

Earnings have exceeded expectations, the housing and labor markets have strengthened, lawmakers in Washington no longer seem to be the roadblock that they were for most of 2012, and money has returned to stock funds again.

The Standard & Poor's 500 Index <.spx> has gained 5.4 percent this year and closed above 1,500 - climbing to the spot where Wall Street strategists expected it to be by mid-year. The Dow Jones industrial average <.dji> is 2.2 percent away from all-time highs reached in October 2007. The Dow ended Friday's session at 13,895.98, its highest close since October 31, 2007.

The S&P has risen for four straight weeks and eight consecutive sessions, the longest streak of days since 2004. On Friday, the benchmark S&P 500 ended at 1,502.96 - its first close above 1,500 in more than five years.

"Once we break above a resistance level at 1,510, we dramatically increase the probability that we break the highs of 2007," said Walter Zimmermann, technical analyst at United-ICAP, in Jersey City, New Jersey. "That may be the start of a rise that could take equities near 1,800 within the next few years."

The most recent Reuters poll of Wall Street strategists estimated the benchmark index would rise to 1,550 by year-end, a target that is 3.1 percent away from current levels. That would put the S&P 500 a stone's throw from the index's all-time intraday high of 1,576.09 reached on October 11, 2007.

The new year has brought a sharp increase in flows into U.S. equity mutual funds, and that has helped stocks rack up four straight weeks of gains, with strength in big- and small-caps alike.

That's not to say there aren't concerns. Economic growth has been steady, but not as strong as many had hoped. The household unemployment rate remains high at 7.8 percent. And more than 75 percent of the stocks in the S&P 500 are above their 26-week highs, suggesting the buying has come too far, too fast.

MUTUAL FUND INVESTORS COME BACK

All 10 S&P 500 industry sectors are higher in 2013, in part because of new money flowing into equity funds. Investors in U.S.-based funds committed $3.66 billion to stock mutual funds in the latest week, the third straight week of big gains for the funds, data from Thomson Reuters' Lipper service showed on Thursday.

Energy shares <.5sp10> lead the way with a gain of 6.6 percent, followed by industrials <.5sp20>, up 6.3 percent. Telecom <.5sp50>, a defensive play that underperforms in periods of growth, is the weakest sector - up 0.1 percent for the year.

More than 350 stocks hit new highs on Friday alone on the New York Stock Exchange. The Dow Jones Transportation Average <.djt> recently climbed to an all-time high, with stocks in this sector and other economic bellwethers posting strong gains almost daily.

"If you peel back the onion a little bit, you start to look at companies like Precision Castparts , Honeywell , 3M Co and Illinois Tool Works - these are big, broad-based industrial companies in the U.S. and they are all hitting new highs, and doing very well. That is the real story," said Mike Binger, portfolio manager at Gradient Investments, in Shoreview, Minnesota.

The gains have run across asset sizes as well. The S&P small-cap index <.spcy> has jumped 6.7 percent and the S&P mid-cap index <.mid> has shot up 7.5 percent so far this year.

Exchange-traded funds have seen year-to-date inflows of $15.6 billion, with fairly even flows across the small-, mid- and large-cap categories, according to Nicholas Colas, chief market strategist at the ConvergEx Group, in New York.

"Investors aren't really differentiating among asset sizes. They just want broad equity exposure," Colas said.

The market has shown resilience to weak news. On Thursday, the S&P 500 held steady despite a 12 percent slide in shares of Apple after the iPhone and iPad maker's results. The tech giant is heavily weighted in both the S&P 500 and Nasdaq 100 <.ndx> and in the past, its drop has suffocated stocks' broader gains.

JOBS DATA MAY TEST THE RALLY

In the last few days, the ratio of stocks hitting new highs versus those hitting new lows on a daily basis has started to diminish - a potential sign that the rally is narrowing to fewer names - and could be running out of gas.

Investors have also cited sentiment surveys that indicate high levels of bullishness among newsletter writers, a contrarian indicator, and momentum indicators are starting to also suggest the rally has perhaps come too far.

The market's resilience could be tested next week with Friday's release of the January non-farm payrolls report. About 155,000 jobs are seen being added in the month and the unemployment rate is expected to hold steady at 7.8 percent.

"Staying over 1,500 sends up a flag of profit taking," said Jerry Harris, president of asset management at Sterne Agee, in Birmingham, Alabama. "Since recent jobless claims have made us optimistic on payrolls, if that doesn't come through, it will be a real risk to the rally."

A number of marquee names will report earnings next week, including bellwether companies such as Caterpillar Inc , Amazon.com Inc , Ford Motor Co and Pfizer Inc .

On a historic basis, valuations remain relatively low - the S&P 500's current price-to-earnings ratio sits at 15.66, which is just a tad above the historic level of 15.

Worries about the U.S. stock market's recent strength do not mean the market is in a bubble. Investors clearly don't feel that way at the moment.

"We're seeing more interest in equities overall, and a lot of flows from bonds into stocks," said Paul Zemsky, who helps oversee $445 billion as the New York-based head of asset allocation at ING Investment Management. "We've been increasing our exposure to risky assets."

For the week, the Dow climbed 1.8 percent, the S&P 500 rose 1.1 percent and the Nasdaq advanced 0.5 percent.

(Reporting by Ryan Vlastelica; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

Read More..

Wall Street Week Ahead: Bears hibernate as stocks near record highs

NEW YORK (Reuters) - Stocks have been on a tear in January, moving major indexes within striking distance of all-time highs. The bearish case is a difficult one to make right now.

Earnings have exceeded expectations, the housing and labor markets have strengthened, lawmakers in Washington no longer seem to be the roadblock that they were for most of 2012, and money has returned to stock funds again.

The Standard & Poor's 500 Index <.spx> has gained 5.4 percent this year and closed above 1,500 - climbing to the spot where Wall Street strategists expected it to be by mid-year. The Dow Jones industrial average <.dji> is 2.2 percent away from all-time highs reached in October 2007. The Dow ended Friday's session at 13,895.98, its highest close since October 31, 2007.

The S&P has risen for four straight weeks and eight consecutive sessions, the longest streak of days since 2004. On Friday, the benchmark S&P 500 ended at 1,502.96 - its first close above 1,500 in more than five years.

"Once we break above a resistance level at 1,510, we dramatically increase the probability that we break the highs of 2007," said Walter Zimmermann, technical analyst at United-ICAP, in Jersey City, New Jersey. "That may be the start of a rise that could take equities near 1,800 within the next few years."

The most recent Reuters poll of Wall Street strategists estimated the benchmark index would rise to 1,550 by year-end, a target that is 3.1 percent away from current levels. That would put the S&P 500 a stone's throw from the index's all-time intraday high of 1,576.09 reached on October 11, 2007.

The new year has brought a sharp increase in flows into U.S. equity mutual funds, and that has helped stocks rack up four straight weeks of gains, with strength in big- and small-caps alike.

That's not to say there aren't concerns. Economic growth has been steady, but not as strong as many had hoped. The household unemployment rate remains high at 7.8 percent. And more than 75 percent of the stocks in the S&P 500 are above their 26-week highs, suggesting the buying has come too far, too fast.

MUTUAL FUND INVESTORS COME BACK

All 10 S&P 500 industry sectors are higher in 2013, in part because of new money flowing into equity funds. Investors in U.S.-based funds committed $3.66 billion to stock mutual funds in the latest week, the third straight week of big gains for the funds, data from Thomson Reuters' Lipper service showed on Thursday.

Energy shares <.5sp10> lead the way with a gain of 6.6 percent, followed by industrials <.5sp20>, up 6.3 percent. Telecom <.5sp50>, a defensive play that underperforms in periods of growth, is the weakest sector - up 0.1 percent for the year.

More than 350 stocks hit new highs on Friday alone on the New York Stock Exchange. The Dow Jones Transportation Average <.djt> recently climbed to an all-time high, with stocks in this sector and other economic bellwethers posting strong gains almost daily.

"If you peel back the onion a little bit, you start to look at companies like Precision Castparts , Honeywell , 3M Co and Illinois Tool Works - these are big, broad-based industrial companies in the U.S. and they are all hitting new highs, and doing very well. That is the real story," said Mike Binger, portfolio manager at Gradient Investments, in Shoreview, Minnesota.

The gains have run across asset sizes as well. The S&P small-cap index <.spcy> has jumped 6.7 percent and the S&P mid-cap index <.mid> has shot up 7.5 percent so far this year.

Exchange-traded funds have seen year-to-date inflows of $15.6 billion, with fairly even flows across the small-, mid- and large-cap categories, according to Nicholas Colas, chief market strategist at the ConvergEx Group, in New York.

"Investors aren't really differentiating among asset sizes. They just want broad equity exposure," Colas said.

The market has shown resilience to weak news. On Thursday, the S&P 500 held steady despite a 12 percent slide in shares of Apple after the iPhone and iPad maker's results. The tech giant is heavily weighted in both the S&P 500 and Nasdaq 100 <.ndx> and in the past, its drop has suffocated stocks' broader gains.

JOBS DATA MAY TEST THE RALLY

In the last few days, the ratio of stocks hitting new highs versus those hitting new lows on a daily basis has started to diminish - a potential sign that the rally is narrowing to fewer names - and could be running out of gas.

Investors have also cited sentiment surveys that indicate high levels of bullishness among newsletter writers, a contrarian indicator, and momentum indicators are starting to also suggest the rally has perhaps come too far.

The market's resilience could be tested next week with Friday's release of the January non-farm payrolls report. About 155,000 jobs are seen being added in the month and the unemployment rate is expected to hold steady at 7.8 percent.

"Staying over 1,500 sends up a flag of profit taking," said Jerry Harris, president of asset management at Sterne Agee, in Birmingham, Alabama. "Since recent jobless claims have made us optimistic on payrolls, if that doesn't come through, it will be a real risk to the rally."

A number of marquee names will report earnings next week, including bellwether companies such as Caterpillar Inc , Amazon.com Inc , Ford Motor Co and Pfizer Inc .

On a historic basis, valuations remain relatively low - the S&P 500's current price-to-earnings ratio sits at 15.66, which is just a tad above the historic level of 15.

Worries about the U.S. stock market's recent strength do not mean the market is in a bubble. Investors clearly don't feel that way at the moment.

"We're seeing more interest in equities overall, and a lot of flows from bonds into stocks," said Paul Zemsky, who helps oversee $445 billion as the New York-based head of asset allocation at ING Investment Management. "We've been increasing our exposure to risky assets."

For the week, the Dow climbed 1.8 percent, the S&P 500 rose 1.1 percent and the Nasdaq advanced 0.5 percent.

(Reporting by Ryan Vlastelica; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

Read More..

Stock futures up, S&P 500 poised to rally for an eighth day

NEW YORK (Reuters) - Stock index futures gained on Friday and the S&P 500 looked set to extend its best winning streak in more than six years, as rosy earnings from Procter & Gamble came amid a broader backdrop of healthy corporate results.

The strong start to the year for the equities market has also been attributed to agreement in Washington to extend the government's borrowing power through mid-May, encouraging signs of recovery in the global economy and seasonal inflows to equity markets.

Those factors helped the S&P 500 rally for a seventh day on Thursday to a five-year peak. Still, the index is struggling to climb convincingly above 1,500, a level it surpassed briefly Thursday for the first time since December 2007.

"You have had more confidence from fund managers to provide more allocations to equity markets," said Rick Meckler, president of investment firm LibertyView Capital Management, who added equities were looking more attractive than bonds or cash.

S&P 500 futures rose 4.7 point and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 44 points and Nasdaq 100 futures rose 12.50 points.

If the S&P 500 rises for an eighth day, it will be its longest winning in eight years. The index had climbed for nine straight days in a run that ended in November 2004.

Procter & Gamble , the world's top household products maker, said Friday quarterly profit soared past expectations and raised its sales and earnings outlook for the fiscal year. Shares were up 1.7 pct at $71.58 in premarket trading.

Pointing to a rotation out of bonds, U.S. 30-year Treasury bonds traded more than a point lower in price on Friday, with yields touching session highs at 3.10 percent.

Recent company earnings have been encouraging. Thomson Reuters data through early Thursday showed that of the 133 S&P 500 companies that have reported earnings so far, 66.9 percent exceeded expectations, more than the 65 percent average over the past four quarters.

Microsoft Corp's reported lower quarterly profit on Thursday as Office software sales slowed ahead of a new launch, offsetting a solid but unspectacular start for its Windows 8 operating system and sending the company's shares down 0.8 percent in premarket trading.

Apple stepped up audits of working conditions at major suppliers last year, discovering multiple cases of underage workers, discrimination and wage problems. The shares, which fell 12 percent Thursday after disappointing earnings, edged up 0.6 percent to $453.40.

German business morale improved for a third consecutive month in January to its highest in more than half a year, providing further evidence that growth in Europe's largest economy was gathering speed after contracting late last year.

Echoing a more positive tone in Europe, ECB President Mario Draghi said he expects the euro zone economy to recover later this year, adding that financial market improvements have not yet trickled into the general economy. Draghi was speaking at the World Economic Forum in Davos on Friday.

The U.S. Commerce Department releases new home sales data for December at 10:00 a.m. Economists forecast a total of 385,000 annualized units, compared with 377,000 in November.

Economic Cycle Research Institute releases its weekly index of economic activity for January 18 at 10:30 a.m. In the prior week the index read 130.

(Editing by Bernadette Baum)

Read More..

Stock futures drop as Apple revenue miss to halt stocks rally

NEW YORK (Reuters) - Stock index futures fell Thursday as Apple slid nearly 10 percent following a revenue miss, and analysts said equities may be due for a pullback after a six-day rally for the S&P 500.

Apple Inc missed Wall Street's revenue forecast for a third straight quarter after iPhone sales came in below expectations, fanning fears its dominance of consumer electronics is slipping. The shares dropped 8.8 percent to $468.64 in premarket trading, wiping out about $50 billion of its market value.

However, some positive economic news looked set to put a floor under stock prices. Growth in Chinese manufacturing accelerated to a two-year high this month and a buoyant Germany took the euro zone economy a step closer to recovery, business surveys showed on Thursday.

"The march to 1,500 on the S&P is looking quite strong, the question is will Apple be the spoiler?" said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

"My guess is that while Nasdaq might suffer losses today, both the Dow and the S&P may do otherwise based on economic news out of China and Europe."

The S&P 500 rose for a sixth day on Wednesday after stronger-than-expected profits from IBM and Google . But Apple could now halt that rally, which had lifted stocks to five-year highs.

S&P 500 futures fell 3.7 point and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 15 points and Nasdaq 100 futures fell 34.75 points.

Apple's disappointing results drew a round of price-target cuts from brokerages. At least seven brokerages, including Barclays Capital, Credit Suisse and Deutsche Bank, cut their price target on the stock by $142 on average to $617.80. Morgan Stanley removed the stock from its 'best ideas' list.

Helping the Dow industrials, diversified U.S. manufacturer 3M Co reported a 3.9 percent rise in profit on solid growth in sales of its wide array of products, which range from Post-It notes to films used in television screens. The shares rose 0.7 percent in premarket trading.

Corporate earnings have helped drive the recent stock market rally. Thomson Reuters data through Wednesday showed that of the 99 S&P 500 companies that have reported earnings, 67.7 percent have exceeded expectations, above the 65 percent average over the past four quarters.

Investors in U.S.-based mutual funds pumped $9.32 billion into stock funds in the week ended January 16, the second consecutive week of inflows for such funds, data from the Investment Company Institute showed Wednesday.

Netflix Inc surprised Wall Street Wednesday with a quarterly profit after the video subscription service added nearly 4 million customers in the U.S. and abroad. Shares jumped nearly 40 percent in premarket trading.

Removing another element of political uncertainty from markets, the U.S. House of Representatives on Wednesday passed a Republican plan to allow the federal government to keep borrowing money through mid-May, clearing it for fast enactment after the top Senate Democrat and White House endorsed it.

(Editing by Bernadette Baum)

Read More..

Stock futures flat, but techs rally in premarket

NEW YORK (Reuters) - Stock index futures were flat on Wednesday, with investors reluctant to make big bets following a five-day rally that took major averages to levels not seen since December 2007.

Tech shares will be in focus with earnings due from tech heavyweight Apple and following strong results from both IBM and Google, which rallied in premarket trading and continued the string of major companies outperforming following results.

Investors were also cautious as they awaited another onslaught of earnings reports, including from Dow component McDonald's Corp . Apple Inc reports after the market's close and investors will scour that report for signs the company can continue to grow at an accelerated pace.

"The market has an upward bias because earnings have generally been better than most expected, but whether we take another leg up from here depends on Apple," said Oliver Purshe, president of Gary Goldberg Financial Services in Suffern, New York. "That is such a heavily watched stock that if it doesn't come out with strong numbers we could take a pause."

Google Inc rose 5.1 percent to $738.61 in light premarket trading a day after the search giant's core Internet business outpaced expectations. Revenue was also higher than expected.

International Business Machines Corp late Tuesday forecast better-than-anticipated 2013 results and also posted fourth-quarter earnings and revenue that beat expectations. The results helped to allay concerns about the tech sector that arose when Intel Corp gave a weak outlook last week. IBM, which is a Dow component, rose 3.9 percent to $203.81 before the bell.

Dow component United Technologies Corp reported earnings that fell from the prior year, hurt by large restructuring charges.

Coach Inc slumped 12 percent to $53.20 before the bell after reporting sales that missed expectations.

According to the latest Thomson Reuters data, of the 74 S&P 500 companies that have reported earnings so far, 62.2 percent have topped expectations, roughly even with the 62 percent average since 1994, but below the 65 percent average over the past four quarters.

Overall, S&P 500 fourth-quarter earnings rose 2.6 percent, according to Thomson Reuters data. That estimate is above the 1.9 percent forecast from the start of earnings season, but well below the 9.9 percent fourth-quarter earnings forecast from October 1, the data showed.

S&P 500 futures fell 1.8 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 3 points and Nasdaq 100 futures rose 4 points.

Both the S&P 500 and Dow Jones industrial average hit five-year closing highs on Tuesday, and recent gains have largely been fueled by a strong start to the earning season. The S&P has jumped 6.4 percent over the past four weeks.

Republican leaders in the U.S. House of Representatives aim on Wednesday to pass a bill to extend the U.S. debt limit by nearly four months, to May 19. The White House welcomed the move, saying it would remove uncertainty about the issue.

The debt limit issue has been viewed as a market overhang for the past few weeks, with many investors worried that if no deal is reached to raise the limit, it could have a negative impact on the economy.

"We're raising our year-end target from 1,535 to about 1,575, in part because of the strong fourth-quarter earnings, but also because with the debt ceiling off the table that's a headwind removed from the market," Purshe said.

(Editing by W Simon and Kenneth Barry)

Read More..

Stock futures flat at five-year highs, investors await earnings

NEW YORK (Reuters) - Stock index futures were flat on Tuesday as investors held back from making large bets ahead of an onslaught of corporate earnings and after recently notching five-year highs.

Both the Dow and S&P 500 closed at their highest levels the earnings season. U.S. markets were closed on Monday for a public holiday.

Despite stronger-than-expected earnings results from major companies, including big banks, at the start of the quarterly reporting season, many investors are worried that other reports will reflect economic uncertainty in the fourth quarter.

"The market has been pleased with earnings thus far, and it is encouraging to see a cyclical company like DuPont show revenue strength, but I'm waiting on more tech and energy earnings until I come down one way or the other on this season," said Adam Sarhan, chief executive of Sarhan Capital in New York.

posted a steep drop in earnings on reduced demand for paint pigment, though revenue was ahead of expectations.

Verizon Communications Inc fell 1.1 percent to $42.06 in premarket trading after reporting a steep loss due to pension liabilities and charges related to superstorm Sandy that offset strength in its wireless business. Travelers Cos Inc also posted earnings that were hurt by losses related to Sandy.

DuPont, Verizon and Travelers are all Dow components, as is Johnson & Johnson , slated to report later Tuesday along with Google Inc and Texas Instruments . Tech earnings will be in particular focus after Intel Corp last week gave a revenue outlook that was below expectations.

Overall, S&P 500 fourth-quarter earnings are forecast to have risen 2.5 percent, according to Thomson Reuters data. That estimate is above the 1.9 percent forecast from a week ago but well below the 9.9 percent fourth-quarter earnings forecast from October 1, the data showed.

S&P 500 futures rose 0.3 point but remained below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 8 points and Nasdaq 100 futures rose 5 points.

Monday was a market holiday for Martin Luther King Day in the United States, and also marked the start of a second term for President Barack Obama, who called for aggressive action on climate change, economic equality and the federal budget.

"It remains a question whether Obama will be able to deliver on his agenda, but a sector like solar power companies could continue to be strong as he pushes for action," Sarhan said.

Markets have recently been pressured by uncertainty stemming from Washington about the federal debt limit and spending cuts that could hamper U.S. growth.

Republican leaders in the House of Representatives said they aim to pass on Wednesday a nearly four-month extension of the U.S. debt limit, allowing the government to borrow enough to meet its obligations during that period.

U.S. shares of Research in Motion jumped 8.9 percent to $17.25 in premarket trading after its chief executive said the company may consider strategic alliances with other companies after the launch of devices powered by RIM's new BlackBerry 10 operating system.

The Dow and S&P 500 closed at five-year highs on Friday as the market registered a third straight week of gains on a solid start to the quarterly earnings season, including from Morgan Stanley and General Electric Co .

(Editing by Chizu Nomiyama)

Read More..

European shares test two-year highs, yen volatile before BOJ

LONDON (Reuters) - European shares inched towards two-year highs and German Bund futures dipped on Monday, as a political attempt to break a budget impasse in the United States revived appetite for shares and dented demand for safe-haven assets.

U.S. House Republican leaders said on Friday they would seek to pass a three-month extension of federal borrowing authority in the coming days to buy time for the Democrat-controlled Senate to pass a plan to shrink budget deficits.

European shares <.fteu3> were supported by the news <.eu>, but with no clear response from the Democrats and a thin session expected due to a market holiday in the United States, the impact on other assets such as Bunds is likely to be limited.

An early morning push by London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> was beginning to fade by mid-morning, leaving the pan-European FTSEurofirst 300 up 0.1 percent and MSCI's world index <.miwd00000pus> steady at a 20-month high. <.l><.eu/>

"There's a bit of encouragement coming out of the U.S.," said Toby Campbell-Gray, head of trading at Tavira Securities in Monaco.

He added that equity markets had remained resilient in the face of an uncertain economic outlook as many investors had stepped in to buy "on the dip" on days when shares had fallen.

Ahead of the region's first finance ministers' meeting of the year, the euro was down slightly at just over $1.33 against the dollar, while the yen firmed after touching a new low, ahead of a Bank of Japan decision expected to deliver bold monetary easing.

According to sources familiar with the Bank of Japan's thinking, the government of new Prime Minister Shinzo Abe and the central bank have agreed to set 2 percent inflation as a new target, supplanting a softer 1 percent 'goal'.

The dollar rose to as high as 90.25 yen earlier on Monday, its highest since June 2010. It later slipped 0.7 percent on the day to 89.39 yen, as traders cut short positions given the BOJ has often fallen short of market expectations.

"Investors are being mindful that the moves we have seen over the course of the last month or two are just worth locking in at least until we understand how the BOJ are really going to play in the future," said Jeremy Stretch, head of currency strategy at CIBC World Markets.

CURRENCY WAR

Japanese equities have surged in recent weeks in anticipation of a more aggressive monetary policy stance, but not everyone is happy.

The slump in the yen has prompted Russia's deputy central bank governor to warn of a new round of 'currency wars' and the medium-term risk of running ultra-loose monetary policies is likely to be a theme of the World Economic Forum in Davos, which opens on Wednesday.

With little in the way of economic data or debt issuance and U.S. markets shut for the Martin Luther King public holiday, the rest of the day was expected to be a fairly quite day for investors.

In bond markets, German Bund yields rose close to the top of this year's 30 basis points range, after Republican lawmakers' efforts to give the U.S. government leeway to pay its bills for another three months. Most other euro zone bonds were trading virtually flat.

The U.S. Treasury needs congressional authorisation to raise the current $16.4 trillion limit on U.S. debt sometime between mid-February and early March. A failure to achieve that could lead to a debt default.

"This is part of the political game, it remains to be seen whether the Democrats will accept it," KBC strategist Piet Lammens said, adding that investors' working scenario was that a solution to raise the ceiling would be eventually found anyway.

OIL OVERSUPPLY

German markets showed no reaction after the country's centre-left opposition party edged Chancellor Angela Merkel's conservatives from power in a regional election on Sunday, reviving its flagging hopes for September's national election.

Oil prices took their cues from a report in the United States at the end of last week that showed consumer sentiment at its weakest in a year as a result of the uncertainty surrounding the country's debt crisis.

Concerns about demand overshadowed supply disruption fears reinforced by the Islamist militant attack and hostage-taking at a gas plant in Algeria, a member of the Organization of Petroleum Exporting Countries.

Brent futures were down by 17 cents to $111.72 per barrel by 1030 GMT. U.S. crude shed 40 cents to $95.16 per barrel after touching a four-month high last week.

"The over-riding fundamental feeling in the market is that crude oil is over-supplied in 2013," said Tony Nunan, an oil risk manager at Mitsubishi.

Last week's data showing a pick-up in the Chinese economy helped keep growth-sensitive copper prices steady at roughly $8,058 an ounce. Gold, meanwhile, reversed Friday's losses to stand at $1,688 an ounce.

(Additional reporting by Sudip Kar-Gupta, Marious Zaharia and Anooja Debnath; Editing by Will Waterman and Giles Elgood)

Read More..

Wall Street Week Ahead: Earnings, money flows to push stocks higher

NEW YORK (Reuters) - With earnings momentum on the rise, the S&P 500 seems to have few hurdles ahead as it continues to power higher, its all-time high a not-so-distant goal.

The U.S. equity benchmark closed the week at a fresh five-year high on strong housing and labor market data and a string of earnings that beat lowered expectations.

Sector indexes in transportation <.djt>, banks <.bkx> and housing <.hgx> this week hit historic or multiyear highs as well.

Michael Yoshikami, chief executive at Destination Wealth Management in Walnut Creek, California, said the key earnings to watch for next week will come from cyclical companies. United Technologies reports on Wednesday while Honeywell is due to report Friday.

"Those kind of numbers will tell you the trajectory the economy is taking," Yoshikami said.

Major technology companies also report next week, but the bar for the sector has been lowered even further.

Chipmakers like Advanced Micro Devices , which is due Tuesday, are expected to underperform as PC sales shrink. AMD shares fell more than 10 percent Friday after disappointing results from its larger competitor, Intel . Still, a chipmaker sector index <.sox> posted its highest weekly close since last April.

Following a recent underperformance, an upside surprise from Apple on Wednesday could trigger a return to the stock from many investors who had abandoned ship.

Other major companies reporting next week include Google , IBM , Johnson & Johnson and DuPont on Tuesday, Microsoft and 3M on Thursday and Procter & Gamble on Friday.

CASH POURING IN, HOUSING DATA COULD HELP

Perhaps the strongest support for equities will come from the flow of cash from fixed income funds to stocks.

The recent piling into stock funds -- $11.3 billion in the past two weeks, the most since 2000 -- indicates a riskier approach to investing from retail investors looking for yield.

"From a yield perspective, a lot of stocks still yield a great deal of money and so it is very easy to see why money is pouring into the stock market," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.

"You are just not going to see people put a lot of money to work in a 10-year Treasury that yields 1.8 percent."

Housing stocks <.hgx>, already at a 5-1/2 year high, could get a further bump next week as investors eye data expected to support the market's perception that housing is the sluggish U.S. economy's bright spot.

Home resales are expected to have risen 0.6 percent in December, data is expected to show on Tuesday. Pending home sales contracts, which lead actual sales by a month or two, hit a 2-1/2 year high in November.

The new home sales report on Friday is expected to show a 2.1 percent increase.

The federal debt ceiling negotiations, a nagging worry for investors, seemed to be stuck on the back burner after House Republicans signaled they might support a short-term extension.

Equity markets, which tumbled in 2011 after the last round of talks pushed the United States close to a default, seem not to care much this time around.

The CBOE volatility index <.vix>, a gauge of market anxiety, closed Friday at its lowest since April 2007.

"I think the market is getting somewhat desensitized from political drama given, this seems to be happening over and over," said Destination Wealth Management's Yoshikami.

"It's something to keep in mind, but I don't think it's what you want to base your investing decisions on."

(Reporting by Rodrigo Campos, additional reporting by Chuck Mikolajczak and Caroline Valetkevitch; Editing by Kenneth Barry)

Read More..