Stock Futures Higher as Fed Stays With Stimulus
NEW YORK (TheStreet) -- Stock futures were pointing to a stronger open on Wall Street Thursday, poised for a fifth day of gains and an extension of all-time highs on the S&P 500 amid a global relief rally driven by the Federal Reserve's decision to maintain its ultra-loose monetary policy of $85 billion a month in asset purchases because of worries the U.S. economy hasn't improved enough for tapering.
Futures for the S&P 500 were gaining 3.5 points, or 3.48 points above fair value, to 1,721.25. The benchmark index increased 1.22% to reach a new all-time high of 1,725.52 following the Fed announcement. Futures for the Dow Jones Industrial Average were adding 20 points, or 28.06 points above fair value, to 15,614. Futures for the Nasdaq were ahead by 6.5 points, or 5.74 points above fair value, to 3,228.25.
"This raises the possibility that the Fed is back in QE-forever mode. It certainly reduces the likelihood that QE will be terminated by mid-2014," Ed Yardeni, the New York-based chief investment strategist at Yardeni Research, said in a note.
In company news, Chrysler Group is late in the stages of preparing documents for an initial public offering, a person familiar with the offer told CNBC, and JPMorgan Chase is expected to underwrite the IPO.Rite Aid (RAD) was jumping nearly 13% to $4.19 in premarket trading after the U.S. retail drugstore chain raised its fiscal 2014 earnings guidance and posted a surprise second-quarter profit driven by its ongoing sales growth momentum and improving margins. Agilent Technologies (A) was surging more than 11% to $54.88 after the company announced that it plans to separate the company into two independent publicly traded companies. One will be focused on life sciences, diagnostics and applied markets, retaining the Agilent name, and the other will be focused on electronic measurement, which will be named later. Oracle (ORCL) shares were off 0.38% to $33.74 in premarket trading after the software maker reported that revenue rose 2% to $8.37 billion; analysts were looking for revenue of $8.48 billion. Adjusted earnings for the quarter of 59 cents a share topped Wall Street estimates of 56 cents. Software revenue rose 6% to $6.08 billion and included a 5% increase in new software licenses and cloud software subscriptions to $1.65 billion. A rise in initial jobless claims during a nonfarm payrolls survey week was reported by the Labor Department Thursday. Claims increased by 15,000 to 309,000 in the week of Sept. 14 after the prior week's figure was revised to 294,000 from 292,000 or what had been the lowest initial claims print since March 2006 thanks to state computer system upgrade that resulted in delayed claims processing. It's expected that the computer system upgrades will require a few more weeks to be completed. Meanwhile a second-quarter U.S. current account deficit of $98.9 billion was reported by the Bureau of Economic Analysis versus the average economist expectation of $97 billion and the first quarter deficit of $104.9 billion. A number of U.S. economic reports will be published at 10 a.m. The National Association of Realtors is predicted to say that existing home sales fell to a seasonally adjusted annual rate of 5.25 million in August from 5.39 million. The general business conditions index of the Philadelphia Fed's Business Outlook Survey for September is expected to have edged up to 10 after dropping to 9.3 in August. The Conference Board's Index of Leading Indicators is estimated to have increased by 0.6% in August after rising by the same amount in July. At 11:30 a.m. Cleveland Federal Reserve Bank President Sandra Pianalto speaks on housing finance policy in Cleveland. The benchmark 10-year Treasury was down 2/32, boosting the yield to 2.699%. The dollar was falling 0.08% to $80.17 according to the U.S. dollar index. The FTSE 100 was advancing 1.43% and the DAX in Germany was tacking on 1.6%. The Hong Kong Hang Seng finished up 1.67% while the Nikkei 225 in Japan settled up 1.8%. December gold contracts were surging $55.90 to $1,363.50 an ounce while November crude oil futures were up 62 cents to $107.90 a barrel. Follow @atwtse -- Written by Andrea Tse in New York >To contact the writer of this article, click here: Andrea Tse.>
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