Stock Futures Point Higher, P&G Pops

NEW YORK ( TheStreet) -- Stock futures were rising Friday after major U.S. indices touched multi-year highs during the prior session and as Procter & Gamble ( PG) shares popped after an upbeat earnings forecast.

Business confidence in Germany improved for a third month in January, according to the Ifo think tank's business climate index, which jumped to 104.2 from 102.4 in December.

Market sentiment also got a boost as the European Central Bank said Friday that 278 banks in the eurozone indicated that they will repay, early, €137.2 billion in three-year loans, issued a little over a year ago.

The amount was larger than expected and pointed to easing financial conditions in the region, and as Marty Mitchell, a head trader at Stifel Nicolaus said, suggested "more stability in Europe and the potential for an improved risk appetite in markets."

The consensus expectation was for the return of #8364;100 billion of the first round of the central bank's cheap loans, or LTROs (long-term refinancing operations), according to a Reuters survey. The news helped fuel a rally in European bank stocks and a fall in German government bond prices.

Futures for the Dow Jones Industrial Average were rising 41 points, or 59.67 points above fair value, at 13,822. Futures for the S&P 500 were up 4.75 points, or 6.93 points above fair value, at 1496. Futures for the Nasdaq were up 11.75 points, or 13.07 points above fair value, at 2730.

Procter & Gamble shares were gaining close to 2% in premarket trading after the company on Friday said it increased its core earnings per share guidance for the year to $3.97 to $4.07 amid "strong productivity improvement and resulting cost savings." The company also increased its outlook for share repurchases to $5 billion to $6 billion.

P&G recorded fiscal second-quarter earnings of $1.22 a share on revenue of $22.2 billion, topping the average analyst estimate of $1.11 a share on revenue of $21.91 billion.

On Thursday, the S&P 500 managed to breach the psychologically significant 1500 mark a number of times during the day. Doreen Mogavero, founder of Mogavero Lee & Co., said that "1500 was the target and traders wanted to see if we could get there this year and we'd gotten there earlier in the year. It's crossed it several times today I think but I don't think you can question the momentum of this market. Apple earnings were not what they were expected to be; that stock took a hard hit yesterday but the market doesn't seem to be too worried about it."

Mogavero said that there have been two camps, both very polarized, on theories of where the market is headed from current levels. Some traders have been feeling that the market is poised to really take off for a "huge new secular bull market" and others feel that a pullback is due.

Mogavero told TheStreet Thursday evening that she was expecting a little bit of consolidation before probably a move higher barring any bad news out of Europe or China. The U.S. macro picture seemed "pretty stable," she said.

Apple ( AAPL) shares were back in positive territory in premarket trading, up 0.67%, after their steep decline the prior session on a disappointing quarterly announcement.

At 10 a.m. EST, the Census Bureau is expected by economists, on average, to report that new-home sales increased to a seasonally adjusted annual rate of 385,000 in December from 377,000.

"With homebuilders' sales expectations strong, we think that new home sales rose further last month," said Paul Diggle, an economist at Capital Economics.

The European markets were higher on the LTRO announcement and encouraging German Ifo data. The DAX in Frankfurt was rising 1.29% while trading action was more subdued in London, with the FTSE up 0.17% after weaker-than-expected data on UK fourth-quarter GDP.

Hong Kong's Hang Seng closed down by 0.08% on some profit taking and the Nikkei in Japan advanced 2.88% on an easing yen currency.

Gold for February delivery was falling $5.10 at $1,664.80 an ounce at the Comex division of the New York Mercantile Exchange, while March crude oil futures were rising 37 cents at $96.32 a barrel.

The benchmark 10-year Treasury was slumping by 17/32, raising the yield to 1.917%. The dollar was dipping by 0.19%, according to the U.S. dollar index.

In corporate news, Microsoft ( MSFT) received a boost in its fiscal second quarter from its server & tools division and Windows 8 licenses, helping it post earnings that topped Wall Street expectations. Shares were off 0.76%.

Honeywell ( HON) posted better-than-expected fourth-quarter results Friday as the conglomerate strived to increase its profit margins.

E*Trade Financial ( ETFC) shares were slumping by more than 2.5% after the company reported a wider-than-expected quarterly loss and a disappointing revenue number as daily average revenue trades declined.

AT&T ( T) posted a narrower loss in the fourth quarter as Apple's ( AAPL) iPhone helped generate record smartphone sales.

Starbucks ( SBUX), the coffee chain, said Thursday that fiscal first-quarter profit rose 13% and global same-store sales in the quarter rose 6%. Shares were popping more than 3.5%.

Cisco ( CSCO) reached an agreement to sell its home networking business unit, including the Linksys router brand, to privately held Belkin, a maker of smartphone cases and computing accessories. Cisco shares were up 0.48%.

A purchase price for the deal, which is expected to close in March, wasn't disclosed.

Select Comfort ( SCSS) shares were plunging by more than 14.5% after the bed manufacturer and retailer posted earnings that missed estimates.

-- Written by Andrea Tse in New York.

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

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