Futures tick higher ahead of Fed
Investors remain jittery as they await the central bank's policy decision and Chairman Bernanke's press conference.
U.S. equity futures traded slightly higher ahead of the much anticipated Federal Reserve policy statement Wednesday. Investors are most concerned with possible Fed tapering and its revised economic forecast. And with rumors of Chairman Ben Bernanke stepping down, all eyes will be on the Fed's news conference.
In other news, Japan's exports grew 10.1% from a year ago in May with exports to the U.S. rising over 16%.
The president of Cyprus has asked the European creditors to revise the terms of its bailout as the nation's banks face a cash crunch. The restructuring of one of the nation's largest banks is taking longer than expected, causing a short-term liquidity crunch in the island nation.
Concerns over deficits in Greece rose again overnight as the Troika said it is worried over the finances of Greece's national health system.
S&P 500 futures rose 2.3 points to 1,647.50.
The EUR/USD was flat at 1.3390.
Spanish 10-year government bond yields rose 1 basis point to 4.56%.
Italian 10-year government bond yields rose 1 basis point to 4.3%.
Gold climbed 0.04% to $1,367.40.
Asian shares were mixed overnight as strength in Japan was offset by weakness in other parts of the region. The Japanese Nikkei 225 Index rose 1.83% and the Topix Index gained 1.86%. In Hong Kong, the Hang Seng Index declined 1.13% while the Shanghai Composite Index fell 0.62% in China. Also, the Korean Kospi fell 0.65% and Australian shares rose 0.98%.
European shares were mostly lower in quiet trading as markets await the Fed. The Spanish Ibex Index declined 0.61% and the Italian FTSE MIB Index fell 0.14%. Meanwhile, the German DAX rose 0.06% and the French CAC 40 Index fell 0.28% while U.K. shares dropped 0.17%.
Commodities were mostly higher overnight following the stronger than expected Japanese trade data. WTI crude futures rose 0.38% to $98.81 per barrel and Brent crude futures gained 0.28% to $106.32 per barrel. Copper futures rose 0.36% to $316.65 per pound. Gold was higher and silver futures fell 0.42% to $21.59 per ounce.
Currency markets were uncharacteristically quiet overnight as markets await the Fed's decision. The EUR/USD was flat at 1.3390 and the dollar fell against the yen to 95.06. Overall, the Dollar Index rose 0.05% on strength against the pound and marginally against the euro.
Earnings reported Tuesday
Key companies that reported earnings Tuesday include:
Adobe Systems (ADBE) reported second quarter earnings per share of $0.36 vs. $0.34 expected on revenue of $1.01 billion, in line. However, guidance for the third quarter was slightly weaker than expected.
FactSet Research Systems (FDS) reported third quarter EPS of $1.15, in line, on revenue of $215.0 million vs. $214.94 million expected.
La-Z-Boy Incorporated (LZB) reported fourth quarter EPS of $0.33 vs. $0.28 expected on revenue of $359.5 million vs. $357.67 million expected.
Stocks moving in the premarket included:
Adobe Systems (ADBE) shares rose 5.21% premarket after reporting earnings.
Tetra Tech (TTEK) shares declined 10.59% as the company cut its guidance but announced a new share buyback.
Pool Corp. (POOL) shares declined 7.71% premarket as the company cut full year guidance.
Notable companies expected to report earnings Wednesday include:
FedEx (FDX) is expected to report fourth quarter EPS of $1.97 vs. $1.99 a year ago.
Actuant (ATU) is expected to report third quarter EPS of $0.66 vs. $0.60 a year ago.
Micron Technology (MU) is expected to report third quarter EPS of $0.02 vs. a loss of $0.32 per share a year ago.
Red Hat (RHT) is expected to report first quarter EPS of $0.31 vs. $0.30 a year ago.
On the economics calendar Wednesday, MBA purchase applications and the EIA oil status report kick off the calendar but all eyes will be on the Federal Open Market Committee decision at 2:00 p.m. ET alongside the updated forecasts of the Fed, followed by Chairman Bernanke's press conference. Overnight, the initial reading of the China HSBC manufacturing PMI is due out as well as the Swiss National Bank decision and the French, German, and broad eurozone manufacturing and service PMIs. There are also British retail sales, Spanish and French bond auctions, and Ireland's GDP report.
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