Stock Futures Pare Gains After ECB Rate Decision
NEW YORK (TheStreet) -- U.S. stock futures pared gains Wednesday but remained strongly planted in positive territory after the European Central Bank opted to keep interest rates unchanged, but investors continued to anticipate stimulus measures by global central banks.
Futures for the Dow Jones Industrial Average were rising by 88 points, or 96.1 points above fair value, at 12,214. Futures for the S&P 500 were up 10.6 points, or 11.1 points above fair value, at 1296, and futures for the Nasdaq were rising 23 points, or 25.2 points above fair value, at 2512.
The ECB said Wednesday that it was keeping its benchmark interest rate at 1% after its monetary policy meeting. However, the markets continued to look for clues that the central bank would show an openness to lowering rates by July in the face of a growing signs of recession on the continent and Spain's troubled banking system.
"There is a necessity for them to show their cards when conditions turn urgent," said Geoffrey Yu, analyst at UBS.Federal Reserve Chairman Ben Bernanke testifies before Congress on Thursday, and it will be his first opportunity to comment on the weak jobs report last Friday. Given that the benchmark interest rate in the U.S. is already at a record low, the market will look for signs from Bernanke Thursday of stimulus measures through a third round of quantitative easing. The major U.S. equity indices finished with slight gains Tuesday as the financial and technology sectors caught a bounce. It was a light day for economic data with the latest read on business activity in the U.S. services sector coming in a hair above expectations. The FTSE in London was rising 1.4% and the DAX in Germany was gaining 1.7%. The Federal Reserve publishes its Beige Book review of business conditions in its 12 districts Wednesday at 2 p.m. EDT. The last beige book pointed to continued moderate growth with economic activity heating up most visibly in Kansas City and Minneapolis. The Beige Book arrives two weeks before the Federal Open Market Committee's meeting on monetary policy. The Hang Seng Index in Hong Kong closed up 1.4% and the Nikkei in Japan added 1.8%. The July crude oil contract was up $1.18 at $85.47 a barrel. August gold futures were gaining $19.30 to $1,636.20 an ounce. The benchmark 10-year Treasury was declining 6/32, raising the yield to 1.6%. The dollar was down 0.3%, according to the dollar index. In corporate news, Ancestry.com (ACOM) is weighing a sale and is working with Frank Quattrone's Qatalyst Partners LLC to find buyers, Bloomberg reported, citing a person with knowledge of the situation. The family-history research Web site Provo probably will attract interest from private-equity firms, said the person. Ancestry.com has a market capitalization of about $964 million, according to Bloomberg. Shares of Ancestry.com climbed 24.17% in premarket trading Wednesday. Diageo (DEO) , the biggest drinks company in the world, said it plans to invest 1 billion pounds ($1.55 billion) to expand production of Scotch whisky. Diageo will build a major new distillery and expand several of its existing distilleries. Shares of Diageo rose 2.12%. Home Depot (HD), the home-improvement retailer, increased its fiscal 2012 share buyback program by $500 million to $4 billion. The company also reaffirmed its fiscal 2012 sales and earnings per share projections -- sales are expected to increase 4.6% this year and earnings are slated at $2.90 a share, an increase of about 17%. Credit card company MasterCard (MA) announced Tuesday that its board approved a new $1.5 billion share repurchase program.
2012 Stock Predictions and Outlook
|Your one-stop shop for 2012 stock recommendations and market predictions.
>To contact the writer of this article, click here: Andrea Tse.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV