Stock futures pare gains after ECB decision
The central bank keeps rates at 1%. Investors speculate on a possible cut by July. The Fed's Beige Book will be published Wednesday afternoon. Investors turn to Bernanke's congressional testimony and hope for hints of QE3 on Thursday.
By Andrea Tse
U.S. stock futures pared gains Wednesday but remained strongly planted in positive territory after the European Central Bank opted to keep interest rates unchanged, but investors continued to anticipate stimulus measures by global central banks.
Futures for the Dow Jones Industrial Average ($INDU) were up by 88 points at 12,214. S&P 500 ($INX) futures were up by 10.6 points at 1,296. Futures for the Nasdaq ($COMPX) were rising by 23 points to 2,512.
The ECB said Wednesday that it was keeping its benchmark interest rate at 1% after its monetary policy meeting. However, the markets continued to look for clues that the central bank would show an openness to lowering rates by July in the face of a growing signs of recession on the continent and Spain's troubled banking system.
"There is a necessity for them to show their cards when conditions turn urgent," said Geoffrey Yu, analyst at UBS.
Federal Reserve Chairman Ben Bernanke testifies before Congress on Thursday, and it will be his first opportunity to comment on the weak jobs report last Friday. Given that the benchmark interest rate in the U.S. is already at a record low, the market will look for signs from Bernanke Thursday of stimulus measures through a third round of quantitative easing.
The major U.S. equity indices finished with slight gains Tuesday as the financial and technology sectors caught a bounce. It was a light day for economic data with the latest read on business activity in the U.S. services sector coming in a hair above expectations.
The FTSE in London was rising 1.4% and the DAX in Germany was gaining 1.7%.
The Federal Reserve publishes its Beige Book review of business conditions in its 12 districts Wednesday at 2 p.m. EDT. The last beige book pointed to continued moderate growth with economic activity heating up most visibly in Kansas City and Minneapolis. The Beige Book arrives two weeks before the Federal Open Market Committee's meeting on monetary policy.
The Hang Seng Index in Hong Kong closed up 1.4% and the Nikkei in Japan added 1.8%.
The July crude oil contract was up $1.18 at $85.47 a barrel. August gold futures were gaining $19.30 to $1,636.20 an ounce.
The benchmark 10-year Treasury was declining 6/32, raising the yield to 1.6%. The dollar was down 0.3%, according to the dollar index.
In corporate news, Ancestry.com (ACOM) is weighing a sale and is working with Frank Quattrone's Qatalyst Partners LLC to find buyers, Bloomberg reported, citing a person with knowledge of the situation. The family-history research Web site Provo probably will attract interest from private-equity firms, said the person. Ancestry.com has a market capitalization of about $964 million, according to Bloomberg.
Diageo (DEO), the biggest drinks company in the world, said it plans to invest 1 billion pounds ($1.55 billion) to expand production of Scotch whisky. Diageo will build a major new distillery and expand several of its existing distilleries.
Home Depot (HD), the home-improvement retailer, increased its fiscal 2012 share buyback program by $500 million to $4 billion. The company also reaffirmed its fiscal 2012 sales and earnings per share projections -- sales are expected to increase 4.6% this year and earnings are slated at $2.90 a share, an increase of about 17%.
Credit card company MasterCard (MA) announced Tuesday that its board approved a new $1.5 billion share repurchase program.
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Definitive margin of victory in Wisconsin last night, not the squeaker most had predicted...
Saw gas yesterday at $2.99 - it just keeps dropping...Where are all the people who claim that evil oil companies always raise gas prices for the summer driving season??
Let's rally on positive news from Europe... Are you kidding me? That sounds like great investment advice. Europe is talking solutions, but not acting them out.
It was a sad day for our nation in Wisconsin last night! The fact that so many people buy into the lie of Socialism and redistrubition of wealth is still unsettling to me. The fact that Barrett got 46% of the vote means that conservatives have a lot to do to reduce the Socialist cancer permeating in this nation back to its rightful place of 15 to 20%.
I read an article the other day that was claiming Romney is going to have more campaign money spent on him than Obama will for his re-election bid. Will you just shake that loss off too?
Hell.. copper was kissing $4 not long ago. Did we have deflation to bring that down? Do you you consider any move up to be inflation and all moves down to be markets?
Tell me.. those silver quarters.. how did they worth compare to last year or so when silver was over $40/ounce? How were they in the late 90s when silver was $5/oz? Have we seen all prices go up by a factor of 6 since the year 2000?
If all commodities were like "dollars" then we wouldn't see things like gold overtaking platinum in worth. Commodities move on their own just like any other investment.
Money in the elections is sickening... both sides. I didn't like how much money Obama used then and I won't like it this year.
Walker gets to finish his terms by making "tough" decisions which is laughable... interestingly the exit polls showed Obama leading Romney substantially. We'll see how the next couple months go...
Yes Brutus.......I almost detest elections that are Ruled by Money or lies and inuendos.
Although McCain lost, for more reasons then that.....
I wanted to vote for John, then he started coddling the Right-wing for votes..He was no longer his own man....And he was getting to old to fight anymore.....He had been bought off, for support.
The topping on the cake was picking an Unknown Air-head for a VP, to try and garner the stray Hillary voters....That didn't work either....Hillary supporters are much more intelligent then that.
That did it for me, and I didn't vote for him...Nor did I vote for Obama.
The other kinds are cost push, like the oil crisis, and Demand Pull.. which would be if people were actually spending the 25trilloion and pushed output. Both of those price increases can eventually become built in when they are expected.
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[BRIEFING.COM] Equities ended on their lows with the S&P 500 down 1.4%.
The S&P entered today's session with a week-to-date gain of 1.5% as investors expected reassuring words from today's Federal Open Market Committee Statement.
Stocks traded with slim losses until this afternoon's FOMC Statement and subsequent comments from Chairman Bernanke sent equities and Treasuries to their lows while also providing a significant boost to the dollar.
Today's Statement was ... More
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