Stock Futures Rise on Draghi's Pledge to Preserve Euro

NEW YORK (TheStreet) -- U.S. stock futures were surging Thursday as European Central Bank President Mario Draghi pledged to do everything possible to guarantee the survival of the eurozone.

A fall in initial jobless claims and a rise in durable goods orders in the U.S. also was encouraging the risk rally.

Futures for the Dow Jones Industrial Average were rallying by 143 points, or 162.95 points above fair value, at 12,780. Futures for the S&P 500 were up by 17.7 points or 19.61 points above fair value, at 1353, and futures for the Nasdaq 100 were up by 35.5 points, or 36.10 points above fair value, at 2579.

"Within our mandate, the ECB is ready to do whatever it takes to preserve the euro," said Draghi at an investors conference in London, according to Reuters. "And believe me, it will be enough ... to the extent that the size of the sovereign premia hamper the functioning of the monetary policy transmission channels, they come within our mandate."

The FTSE in London was rising 1.46% Thursday and the DAX in Germany was gaining 1.67% in reaction to his remarks.

"Draghi's words carry a great deal of weight because he has in the past refused to fill in where governments fail, recognizing the futility of sticking a finger in the dyke," noted Andrew Wilkinson, chief economic strategist at Miller Tabak.

In U.S. economic news, the Labor Department reported Thursday that initial jobless claims fell by 35,000 to 353,000 in the week ended July 21. Economists had forecast that initial jobless claims would fall to 380,000.

The four-week moving average declined to 367,250, from 376,000, the lowest level since March.

The number of Americans still collecting jobless benefits fell by 30,000 in the week ended July 14 to 3.29 million.

The Commerce Department said that durable goods orders rose 1.6% in June after rising 1.6% in May. Economists had predicted that durable goods orders would increase 0.4% in June.

Excluding the transportation component, durable goods orders fell 1.1%, which the steepest decline in five months.

The National Association of Realtors releases its pending home sales index for June at 10 a.m.

U.S. stocks finished mixed Wednesday as investors reacted to another round of spotty earnings reports and disappointing new home sales data, though growing chatter about the prospect of more monetary stimulus from the Federal Reserve provided some support for equities.

A handful of blue-chip quarterly earnings reports were released Thursday.

Exxon Mobil (XOM) shares were sliding 1.42% in premarket trading after the oil and gas giant reported second-quarter earnings of $1.86 a share on revenue of $127.36 billion; analysts expected earnings of $1.95 a share on revenue of $115.08 billion, according to a Reuters survey of analysts.

United Technologies (UTX) shares were up 0.12% after the company posted an increase in quarterly earnings of less than 1% as slowing Chinese economic growth and the European crisis hurt sales of its products.

3M (MMM) shares were ticking up 0.34% after the diversified technology company beat quarterly earnings estimates Thursday in part driven by strength in its health care, industrial and transportation businesses. 3M reported earnings of $1.66 a share; analysts expected $1.65 a share. Sales of $7.53 billion came in about $250 million below the Wall Street target. 3M's full-year outlook was unchanged.

Facebook (FB), the social networking giant, also is expected to post its quarterly results after Thursday's closing bell. It's the company's first-ever report as a public company.

Analysts expect Facebook to report a profit of 12 cents a share on revenue of $1.15 billion.

Facebook partner Zynga (ZNGA) on Wednesday reported a below-consensus quarterly profit and lowered its outlook.

Regarding its fiscal 2012 outlook, the FarmVille maker cited a "a more challenging environment on the Facebook web platform." It said it now sees earnings of 4 cents to 9 cents a share. Wall Street analysts were looking for earnings of 27 cents a share.

Royal Dutch Shell (RDS.A), the European oil behemoth, posted a decline in second-quarter profit, mostly because of lower oil prices.

Shell's "current cost of supplies" earnings, which strips out the impact of swings in the price of oil between its production and sale, was $6.0 billion (€4.94 billion), compared with $8 billion a year earlier.

September crude oil futures were rising $1.03 at $90 a barrel. August gold futures were up by $6.50 at $1,614.60 an ounce.

The benchmark 10-year Treasury was down 10/32, raising the yield to 1.439%, while the greenback was slipping 0.88%, according to the dollar index.

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-- Written by Andrea Tse in New York.



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