Stocks set to extend gains on upbeat earnings

NEW YORK (AP) - July 27, 2010

Chemical maker DuPont Co. became the latest company to easily top second-quarter profit and revenue forecasts, adding to a string of earnings reports in recent days that have shown the economy might not be slowing as much as investors had anticipated.

DuPont also raised its profit outlook for the year. Such outlooks have been a boon to the market because they indicate companies are gaining confidence in a global economic recovery.

Some major European banks, including UBS AG and Deutsche Bank AG, reported strong earnings as well. The results came a few days after banks across the continent were reviewed to see which would survive another economic downturn. Major European indexes rose following the earnings and another positive report on Germany's economy.

BP, embroiled by the Gulf of Mexico oil spill, is replacing its CEO Tony Hayward with American Robert Dudley. The British oil company reported a record quarterly loss and set aside $32.2 billion to cover the costs of the spill.

The euro rose above $1.30. It was below $1.20 in early June when investors were more concerned with the health of Europe's economy.

Stocks fell worldwide in May and June because of worries that mounting government debt across Europe would stall a global recovery and severely hurt banks across the continent. Strong earnings from U.S. and European companies over two weeks have helped to soothe those concerns.

A report on July consumer confidence due out later Tuesday could temper the upbeat mood in the market. The Conference Board report is expected to show its consumer confidence index dipped again in July, falling to 51.0 from 52.9, according to economists polled by Thomson Reuters. Last month, the index posted its largest drop since February, which helped push stocks sharply lower.

Confidence has waned in recent months primarily because of ongoing concern about high unemployment. With consumers not as confident as they were just a few months ago, their spending has slowed. Consumer spending accounts for a large portion of the nation's economy.

Ahead of the opening bell, Dow Jones industrial average futures rose 64, or 0.6 percent, to 10,521. Standard & Poor's 500 index futures rose 7.40, or 0.7 percent, to 1,116.90, while Nasdaq 100 index futures rose 11.00, or 0.6 percent, to 1,898.50.

The Dow has surged in July, rising 7.7 percent during the month. The sharp gains helped push the index back into the black for the year on Monday. In the past three trading days alone, the Dow has jumped 4 percent because of consistently strong earnings and outlooks.

Stocks got a lift Monday after a report on new home sales rose more than expected last month. The housing market has remained weak, particularly since a tax credit for home buyers expired at the end of April.

The S&P/Case-Shiller home price index for May due out later Tuesday could provide greater detail about whether the market is showing some signs of stabilization. Economists forecast the home price index for the country's 20 largest metropolitan areas rose 4 percent in May compared with a year ago.

Meanwhile, bond prices fell. The yield on the 10-year Treasury note, which moves opposite its price, rose to 3.04 percent from 2.99 percent late Monday. Its yield is often used to set interest rates on mortgages and consumer loans.

DuPont shares rose $1.96, or 5 percent, to $40.95 in pre-opening trading. Shares of Deutsche Bank trading in the U.S. rose $3.52, or 5.3 percent, to $69.70, while UBS shares rose $1.21, or 8 percent, to $16.36. BP rose a penny to $38.66.

Overseas, Britain's FTSE 100 rose 0.8 percent, Germany's DAX index gained 0.6 percent, and France's CAC-40 rose 1.2 percent. Japan's Nikkei stock average fell 0.1 percent.

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