Stock Futures Gain on Japan's Stimulus Move, Housing Data
NEW YORK (TheStreet) -- Stock futures were higher Wednesday as Japan's central bank surprised the markets by joining the Federal Reserve and European Central Bank with its own stimulus announcement and after housing starts data pointed to a rising trend.
Futures for the Dow Jones Industrial Average were up 25 points, or 37.36 points above fair value, at 13,524. Futures for the S&P 500 were up nearly 3 points, or 3.23 points above fair value, at 1456. Futures for the Nasdaq were rising 6 points, or 5.37 points above fair value, at 2856.
The Bank of Japan announced after its policy meeting overnight that it will boost its asset purchase and loan program by 10 trillion yen ($127 billion) to 80 trillion yen, and extend the deadline on its purchase program by six months to the end of 2013, amid more disappointing data including weakness in exports and factory output.
"Bank of Japan opened a new chapter on the global trend competitive currency devaluation, following aggressive steps by the ECB and the FOMC with a strong response of its own," said a Cantor Fitzgerald note."The market (including us) had expected the BoJ to make another easing move at the October policy meeting when the BoJ will publish its semi-annual economic outlook," said Kiyoko Katahira, an analyst at Societe Generale. "However, the easing happened earlier." "We think action from the ECB and the Fed was also a factor that led the BoJ to act sooner, with a special concern for further yen appreciation. Moreover, rising tensions with China in the past week may turn out to be another drag on exports at least in the short term." The major U.S. equity averages finished mixed in sluggish trading Tuesday with lingering eurozone uncertainties set against more evidence of a recovery in the housing market, with data on Tuesday from the National Association of Home Builders showing that builder confidence in the market for newly built, single-family homes rose for a fifth straight month in September. The Census Bureau and Housing Department said Wednesday that housing starts rose 2.3% to a seasonally adjusted annual rate of 750,000 in August from a downwardly revised July estimate of 733,000. Economists were expecting a rate of 770,000 in August. "While the increase in starts for August was a bit less than expected and July's level was revised modestly lower, the general trend is higher," said a BTIG note. Building permits fell 1% to 803,000, compared with expectations of an 800,000 pace, from the downwardly revised July rate of 811,000. Existing home sales, which are scheduled for release by the National Association of Realtors at 10 a.m., are predicted to have risen to a seasonally adjusted annual rate of 4.58 million in August from 4.47 million in July. The FTSE in London was up 0.05% and the DAX in Germany was off 0.11% early Wednesday. Hong Kong's Hang Seng index closed higher by 1.16% and the Nikkei in Japan finished up by 1.19%. The benchmark 10-year Treasury was rising 5/32, diluting the yield to 1.795%. The greenback was up 0.11%, according to the dollar index. October crude oil futures were slipping 39 cents to $94.90 a barrel. December gold futures were up $4.70 at $1,775.90 an ounce. In corporate news, Microsoft (MSFT) announced plans Tuesday for a 15% dividend hike. The software giant said its board approved a quarterly dividend of 23 cents a share, up from its current payout of 20 cents. The new dividend implies a forward annual yield of 2.95% based on the stock's closing price of $31.17 on Tuesday. General Mills (GIS), the maker of Cheerios, posted fiscal first-quarter earnings of 66 cents a share, topping expectations of 62 cents a share. Revenue came in at $4.05 billion, below forecasts of $4.08 billion. Goldman Sachs (GS) said David Viniar plans to retire as chief financial officer in January 2013. Viniar, who will join Goldman's board, is to be succeeded by Harvey Schwartz, the current co-head of the company's security division. Viniar has spent more than three decades at the investment bank. Apple (AAPL) shares crested above $700 in regular-session trading for the first time on Tuesday, following through on the strength seen in Monday's after-hours action. Shares of the iPod and iPad maker finished at $701.91, up 0.3%. Bed, Bath & Beyond (BBBY) is expected Wednesday to report its fiscal second-quarter results after the closing bell and analysts expect a profit of $1.02 a share in the August-ended period on revenue of $2.54 billion.
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