Stock futures rise, traders try to build on rally
NEW YORK – Stock futures rose Wednesday as investors try to build momentum following a late-day rally during the previous trading session.
Better-than-expected durable goods orders last month added to gains in the futures market.
The Dow Jones industrial average closed down just 22 points Tuesday after being down by more than 250 points shortly after trading opened. The bounce back was stoked by comments from Congressional leaders saying they would not push for banks to spin-off lucrative trading desks as part of financial regulation reform.
Big swings in trading have again become the norm in recent weeks, similar to the volatility that helped define the market during the credit crisis and the early parts of the recovery last year.
The end-of-session focus Tuesday on domestic news was a stark contrast from what had been driving trading for the past few weeks. Investors had been almost wholly focused on whether steep budget cuts to manage rising debt in European countries would slow a global economic recovery in the coming months.
Concern about Europe’s health was overshadowing consistent reports that the U.S. economy was continuing its slow, steady growth. Early in the year, those reports pushed stocks higher.
The durable goods report provides further evidence the U.S. economy is improving and could bring some attention back to a domestic rebound. Orders for big-ticket manufactured goods rose 2.9 percent last month, more than double the 1.3 percent gain forecast by economists polled by Thomson CHICAGOPRESSRELEASE.COM. It was the biggest jump in orders in three months.
Ahead of the opening bell, Dow Jones industrial average futures rose 85, or 0.9 percent, to 10,110. Standard & Poor’s 500 index futures rose 10.50, or 1 percent, to 1,083.50, while Nasdaq 100 index futures gained 21.00, or 1.2 percent, to 1,836.50.
The U.S. manufacturing sector has shown consistent growth during the country’s recovery. April’s figures were boosted by a big rise in transportation orders. Excluding transportation, orders dipped 1 percent.
A separate report from the Commerce Department is expected to show some improvement in the housing market as well. However, the report could be brushed aside because it might have be inflated by home buyers rushing to take advantage of a tax credit that expired last month.
Economists forecast sales of new homes rose 4.6 percent in April to a seasonally adjusted annual rate of 430,000 units. The report is due out at 10 a.m. EDT.
Even though signs still point to recovery in the U.S., concerns about Europe remain. The euro, which is used by 16 European countries, fell again Wednesday. The currency has become a proxy for investor confidence in Europe’s ability to contain its debt problems the health of the continent’s economy. The euro remains close to the four-year low it hit last week. It was down to $1.2279 Wednesday.
Despite the ongoing concerns, major European indexes snapped back after big losses Tuesday.
Britain’s FTSE 100 gained 2.4 percent, Germany’s DAX index rose 2.1 percent, and France’s CAC-40 climbed 3.1 percent.
Meanwhile, U.S. Treasury prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.25 percent from 3.16 percent late Tuesday.
Sourced from Chicagopressrelease.com
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