Stock futures rise, point to higher opening
June 2, 2010 The expected higher open comes even as world markets mostly
fell. U.S. markets tumbled late Tuesday and Asian and European
markets followed that decline, reacting to news that the U.S.
government launched criminal and civil investigations of the Gulf
of Mexico oil spill.
Attorney General Eric Holder's disclosure of the investigations
led to a sell-off at the end of the day. The Dow Jones industrial
average tumbled nearly 113 points, its fifth decline in the last
six sessions.
Futures are getting a boost as the euro holds above a four-year
low it hit Tuesday. The euro, which is used by 16 European
countries, has heavily influenced trading over the past month. It
has particularly influenced futures trading when there are few
other economic reports out for investors to review and help drive
trading.
The currency has become an indicator of confidence in Europe's
ability to contain a sovereign debt crisis that began in Greece,
but has spread to other countries, including Spain and Portugal.
The euro was nearly unchanged at $1.2199.
Ahead of the opening bell, Dow Jones industrial average futures
rose 34, or 0.3 percent, to 10,053. Standard & Poor's 500 index
futures rose 4.40, or 0.4 percent, to 1,073.90, while Nasdaq 100
index futures rose 13.25, or 0.7 percent, to 1,844.25.
With traders mostly focused on the health of Europe's economy
and political events over the past month, domestic economic reports
have taken somewhat of a backseat. Stocks couldn't hold onto early
gains Tuesday following a better-than-expected report on the
manufacturing sector from the Institute for Supply Management.
A report Wednesday is expected to show pending home sales surged
in April. However, like many other housing reports from the month,
investors are likely to dismiss the results. That's because April
was the final month for home buyers to qualify for a tax credit.
Analysts widely expect housing data to weaken in the coming months
because the credit has expired.
The National Association of Realtors pending home sales index,
which tracks signed contracts to buy previously occupied homes,
likely rose to 108 in April, according to economists surveyed by
Thomson Reuters. That would represent a 5 percent increase from
March's reading of 102.9.
The report is due out at 10 a.m. EDT.
One economic report that should draw the attention of investors
will be the Labor Department's monthly employment report due out on
Friday. High unemployment still remains a major obstacle to a
sustained recovery in the country. A strong report could provide
relief for investors worried about a potential slowdown in the
nation's recovery.
Economists predict the unemployment rate dipped to 9.8 percent
in April as employers added 513,000 jobs. Estimates vary widely as
there remains some uncertainty about the pace of a jobs recovery.
Weekly reports on initial claims have hovered close to 450,000
throughout the year, which is considered above the level that would
indicate strong, sustained employment growth.
Meanwhile, bond prices were narrowly mixed Wednesday. The yield
on the benchmark 10-year Treasury note, which moves opposite its
price, was unchanged at 3.27 percent compared with late Tuesday.
Oil and gold prices both fell.
Overseas, Britain's FTSE 100 dropped 1.1 percent, Germany's DAX
index fell 0.7 percent, and France's CAC-40 fell 1.3 percent.
Japan's Nikkei stock average fell 1.1 percent.