Stock Futures Rise on Stimulus Hopes
NEW YORK (TheStreet) -- Stock futures were climbing Thursday as the markets hoped for signs of monetary stimulus from Federal Reserve Chairman Ben Bernanke at his congressional testimony and after a fall in weekly initial jobless claims.
Futures for the Dow Jones Industrial Average were ahead by 66 points, or 77.2 points above fair value, at 12,485. Futures for the S&P 500 were up 9.8 points, or 10.8 points above fair value, at 1325, and futures for the Nasdaq were up 15.3 points, or 19 points above fair value, at 2565.
The major U.S. equity indices finished Wednesday's powerful 2%-plus rally on a high note as investors flooded into stocks on the hope that the Fed could soon signal its openness to another round of quantitative easing.
Bernanke testifies before the Joint Economic Committee in Congress at 10 a.m. EDT. Investors will parse the nuances of his congressional testimony for guidance ahead of the FOMC meeting in two weeks.Policymakers in recent days remained divided over the need for more stimulus and investors want to know if they'll ultimately agree to act on tepid domestic jobs growth, deepening European contagion risks and the looming U.S. fiscal cliff with an Operation Twist II or QE III this month. Federal Reserve Vice Chair Janet Yellen said Wednesday night that "risk management considerations arising from today's unusual circumstances strengthen the case for additional accommodation," suggesting that the Fed could ramp up its bond purchasing program or hold off on interest rate hikes. The Labor Department reported Thursday that weekly initial jobless claims for the week ended June 2 fell to 377,000 from the previous week's upwardly revised figure of 389,000. The decline was the first since April. Economists surveyed by Briefing.com expected the number of Americans filing unemployment claims for the first time to slide to 375,000. The four-week moving average was 377,750, an increase of 1,750 from the previous week's average of 376,000. Continuing claims for the week ended May 26 was 3.293 million, an increase of 34,000 from the preceding week's level of 3.259 million. At 3 p.m., the Federal Reserve is expected to report that consumer debt rose by $10 billion after soaring by $21.4 billion in March. The FTSE in London was up 0.7% and the DAX in Germany was up 0.6%. The Hang Seng Index in Hong Kong settled up 0.9% and the Nikkei in Japan rose 1.2%. The July crude oil contract was down 44 cents at $84.58 a barrel. August gold futures were falling $18.50 to $1,615.70 an ounce. The benchmark 10-year Treasury was advancing 11/32, lowering the yield to 1.6%. The dollar was trading sideways, according to the dollar index. In corporate news, Apple (AAPL) has moved to stop Samsung's sale of the Galaxy S III smartphone in the U.S. Shares of Apple rose 0.6% in premarket trading Thursday. Nasdaq OMX Group (NDAQ) announced Wednesday a $40 million compensation plan for financial organizations that lost out in the botched Facebook (FB) IPO last month. J.M. Smucker (SJM), the maker of jellies and jams, reported fourth-quarter net income Thursday of $104.1 million, or 93 cents a share, up from year-earlier earnings of $94.9 million, or 82 cents a share. Adjusted profit rose to $1.10 a share from $1 a share. Net sales for the fourth quarter were $1.36 billion. On average, analysts expected earnings of $1 a share on sales of $1.36 billion. For fiscal year 2013, the company anticipates that net sales will increase 7% and non-GAAP earnings will be between $5 and $5.10 a share. The earnings projection excludes a cost of 50 cents a share for special projects. lululemon athletica (LULU) reported Thursday first-quarter earnings of $46.6 million, or 32 cents a share, up from year-earlier earnings of $33.4 million, or 23 cents a share. The athletic wear retailer posted first-quarter revenue of $285.7 million. Analysts, on average, anticipated first-quarter earnings of 30 cents a share on revenue of $270.9 million.
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