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Stock Futures Rise After China GDP, Mild PPI


NEW YORK ( TheStreet) -- U.S. stock futures were pointing higher Friday, but paring gains, as investors weighed in-line China gross domestic product growth against mixed bank earnings reports.

A read on inflation came in better than expected as U.S. producer prices rose just 0.1% month-over-month.

Futures for the Dow Jones Industrial Average were rising 40 points, or 32.73 points above fair value, at 12,542. Futures for the S&P 500 were up by 4 points, or 3.49 points above fair value, at 1333. Futures for the Nasdaq 100 were up 10 points, or 8.3 points above fair value, at 2548.

JPMorgan Chase (JPM - Get Report) reported second-quarter earnings of $1.21 a share on revenue of $22.9 billion, topping the average expectation of earnings of 70 cents a share on revenue of $21.8 billion, according to a poll of analysts by Thomson Reuters.

Second-quarter results included $4.4 billion pretax loss, or 69 cents a share, from trading losses at the firm's Chief Investment Office and a $1 billion pretax benefit, or 16 cents a share from securities gains in the CIO's investment securities portfolio.

But JPMorgan said ahead of its earnings release that it's restating its first-quarter earnings lower to reflect the impact of attempts to mask the extent of losses suffered by its Chief Investment Office at that time

Shares were up 0.97% in premarket trading.

Shares of Wells Fargo (WFC) were ticking down 0.12% after the U.S. bank and top mortgage lender reported second quarter earnings of 82 cents a share and a decline in revenue by 1.3% from the prior quarter to $21.3 billion. On average, analysts were expecting earnings of 81 cents a share on revenue of $21.35 billion.

In global economic news, China's National Bureau of Statistics said Friday that the country's economic growth fell to 7.6% in the second quarter year-over-year, the slowest rate of growth since the first quarter of 2009 and marking the sixth straight quarter of declines, which was as expected. Capital spending and domestic consumption helped promote growth but exports weighed down the overall figure.

"However, the official report contained a piece of good news, which was that quarterly growth quickened to 1.8% quarter-over-quarter from 1.6% in Q1, which was stronger than median expectations," said Klaus Baader, senior economist at Societe Generale. "While not too much emphasis should be placed on this, it may be a sign that growth has already bottomed in Q1."

"Our forecast remains that the Q2 annual growth rate is likely to mark the low in the current cycle, and that thanks to both monetary and fiscal stimulus Q3 growth will strengthen to around 8%," he said.

The FTSE in London was rising 0.73% and the DAX in Germany was higher by 0.97%. Hong Kong's Hang Seng Stock index closed up 0.35% and the Nikkei finished flat.

The Labor Department reported that the producer price index rose 0.1% in June after falling 1% in May, which was better than the decline of 0.5% that economists surveyed by Thomson Reuters were expecting for last month, easing some worries about deflationary pressures and perhaps buying the Federal Reserve time on producing more monetary easing. The core figure rose 0.2%, as expected, after increasing by the same amount previously.

The July University of Michigan Consumer Sentiment Index will be released at 9:55 a.m. and is expected to rise to 73.4 from 73.2 in June.

August crude oil futures were rising 97 cents to $87.05 a barrel. August gold futures were popping $17.80 to $1,583.10 an ounce.

The benchmark 10-year Treasury was falling 2/32, lifting the yield to 1.483%, while the dollar was slipping 0.11%, according to the dollar index.

The major U.S. equity averages finished in the red again on Thursday as a halfhearted rally late in the session fell short. A better than expected initial jobless claims report was viewed with skepticism as investors couldn't shake a malaise fueled by fading hopes for additional stimulus from the world's central banks and a weak start to second-quarter reporting season.

In other corporate news, Lexmark (LXK) lowered its second-quarter outlook on Thursday, citing a "weaker than expected demand environment, particularly in Europe, and a larger than expected impact from unfavorable changes in currency exchange rates."

The company now sees earnings excluding items of 87 to 89 cents a share for the June-ended period, below a previous guidance for a profit of 95 cents to $1.05 a share. The Lexington, Ky.-based printer company expects revenue to decline 12% in the quarter from year-ago levels vs. a prior forecast for a 7-to-9% decline on the top line.

The average estimate of analysts polled by Thomson Reuters is for a profit of 98 cents a share in the quarter on revenue of $956.6 million.

Bedford, Mass.-based data delivery technology company Acme Packet (APKT) said its board has approved the buyback of up to $200 million worth of its common stock over the next year.

New York & Co. (NWY) said it expects its second-quarter results to exceed previous expectations. The company now sees an operating loss of $5 million to $7 million for the quarter vs. a loss of $15.1 million in the same period a year earlier.


-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here: Andrea Tse.

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