Stock Futures Signal Pause After Record Highs

NEW YORK ( TheStreet) -- Stock futures were trading sideways Wednesday, taking a breather after the major indices on Tuesday again soared to record levels.

Cognizant Technology ( CTSH) was popping 5.49% to $68.44 in premarket trading after the tech services provider booked first-quarter earnings of $1.02 a share, exceeding expectations by nine cents. Revenue also exceeded estimates amid a 23% increase in European sales.

Whole Foods Market ( WFM) was surging 8.08% to $100.30 after the specialty supermarket surprised Wall Street by beating analysts' quarterly earnings estimates. It also announced a two-for-one stock split.

Electronic Arts ( EA) was surging 7.28% to $19.75 after predicting Tuesday that full-year earnings would come in above analysts' estimates just after announcing that it and media giant Walt Disney ( DIS) entered a multi-year deal to develop new "Star Wars" video games.

"Earnings ... have bettered expectations ... but as we have pointed out in the past, this should not come as much of a surprise since expectations had been lowered so much," David Joy, Chief Market Strategist, at Minneapolis, MN-based Ameriprise Financial, wrote in a note. "And it seemingly overlooks the fact that top-line revenue growth has been disappointing - cutting one's way to prosperity works for only so long. Ultimately, it is the ongoing activism of central banks that seems to account for the refusal of stock markets to correct in any meaningful way, and on the contrary, to power their way to a series of new highs."

Futures for the S&P 500 were down 0.75 points, or 1.46 points below fair value, to 1,619.75 after the index settled at an all-time high of 1,625.96 Tuesday. Futures for the Dow Jones Industrial Average were unchanged, or 10.2 points below fair value, to 14,983 after the Dow closed above 15,000 for the first time. Futures for the Nasdaq were up 1.25 points, or 0.92 points above fair value, to 2,947.75.

Major U.S. stock markets gained Tuesday afternoon as investors bought shares after central banks from Australia to Japan took actions to stimulate their respective economies.

AOL ( AOL) was falling 5.31% to $39.22 after the online media company posted first-quarter profit of 32 cents a share, missing estimates by a penny. The company beat on revenue expectations, driven by a rise in display advertising sales.

The Mortgage Bankers Association released its seasonally adjusted index of mortgage application activity Wednesday morning. The index, which includes both refinancing and home purchase demand, rose 7% in the week ended May 4 after ticking up 1.8% in the week ended April 26.

Thomson Reuters reported that the blended estimate for the first quarter, reflecting reported results and analyst expectations, is for year-over-year growth of 5.5% from the S&P 500, down from 6.3% in the fourth quarter. About 83% of S&P 500 companies have already reported.

Federal Reserve Gov. Jeremy Stein at 9:30 a.m. EDT will appear at a panel on dollar funding and lending by global banks at a Chicago Fed banking conference.

Overseas markets were rallying after the record close of U.S. stocks Tuesday. They also were getting a boost after China's trade growth on Wednesday showed an acceleration beyond expectations in April, and after an unexpected rise in German industrial output for the second straight month in March.

Japan's Nikkei 225 finished up 0.74% and the Hong Kong Hang Seng index closed up 0.86%. The FTSE 100 in London was up 0.2% while the DAX in Germany was higher by 0.37%.

June gold futures were up $2.10 to $1,450.90 an ounce. Light sweet crude oil for June delivery was off 23 cents to $95.39 a barrel.

The benchmark 10-year Treasury was down 1/32, raising the yield to 1.786%. The dollar was off 0.31% to $82.03 according to the U.S. dollar index.

Written by Andrea Tse in New York

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

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