Futures Up on Rising Housing Starts, Dell

NEW YORK ( TheStreet) -- U.S. stock futures pointed to a stronger open Wednesday morning after strong housing starts data and Dell ( DELL) reported easily topping analysts' fourth-quarter profit expectations.

Futures for the Dow Jones Industrial Average were up by 35 points, or 30 points above fair value, at 12,237. Futures for the S&P 500 were higher by 4 points, or 5 points above fair value, at 1331, and Nasdaq futures were ahead by 6 points, or 7 points above fair value.

Stocks fell Tuesday as higher inflation in China pressured basic material stocks, and lower-than-expected January retail sales pressured market sentiment.

Late Tuesday, Dell blew past profit estimates with fourth-quarter earnings of 53 cents a share, compared with the profit of 37 cents a share that Wall Street projected. The PC maker also said fourth-quarter gross margin came in at 21%. The stock was trading 6.7% higher at $14.84 ahead of Wednesday's opening bell.

The Commerce Department said housing starts rose to 596,000 in January, from 520,000 in December, compared with the 540,000 starts, up from December's initially reported level of 529,000, that economists had been expecting, according to Briefing.com. Building permits fell to 562,000 in January, from 627,000 in December. Economists had only expected permits to fall to 575,000 from December's previously reported level of 635,000.

Deals news was also supporting the market. Sanofi-Aventis ( SNY) agreed to buy U.S. biotech company Genzyme ( GENZ) for $74 a share in cash, or $20.1 billion. During premarket trading, Sanofi's stock was up by 1.2% at $34.91 and Genzyme shares were gaining 1.7% to $75.56.

Shares of Family Dollar ( FDO) were trading 28.4% higher at $56.49 Wednesday after Nelson Peltz's Trian Fund offered to take the discount-chain store private for $55 to $60 a share.

Global markets were also trading higher. Hong Kong's Hang Seng jumped 1.1% and Japan's Nikkei added 0.6%. London's FTSE was adding 0.7% and the DAX in Frankfurt was ahead by 0.2%.

Producer prices rose 0.8% in January, which was mildly higher than the 0.7% uptick that the market had expected, according to Briefing.com. The core rate, which excludes volatile food and energy costs, gained 0.5%, compared with the growth of 0.2% that had been expected. In December, producer prices rose 0.9% and the core rate increased 0.2%.

Industrial production is expected to expand 0.6% in January, after rising 0.8% in December, when the Federal Reserve releases its report at 9:15 a.m. Capacity utilization is slated to climb to 76.4%, from 76% .

At 2 p.m., the Federal Reserve Open Market Committee will release the minutes from its Jan. 25-26 meeting.

Borders ( BGP) filed for Chapter 11bankruptcy protection on Wednesday saying, in a statement, that it "does not have the capital resources it needs to be a viable competitor."

At 10:30 a.m., the Energy Information Administration will issue its weekly read on energy inventories. According to a Platts survey, analysts are expecting an increase of 2.8 million barrels to crude oil inventories in the week ended Feb. 11.

Late Tuesday, the American Petroleum Institute said crude supplies fell by 354,000 barrels last week.

In commodity markets, the March crude oil contract was trading 55 cents higher at $84.87 a barrel. The April gold contract, the most actively traded gold future, was higher by $1.20 to trade at $1,375.30 an ounce.

The benchmark 10-year Treasury rose 4/32, lifting the yield to 3.587%. The dollar weakened against a basket of currencies with the dollar index down by 0.03%.

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--Written by Melinda Peer in New York.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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