Futures rise on diminishing fears of tapering
Better-than-expected eurozone confidence data are also helping ahead of more key US releases Thursday.
U.S. equity futures rose marginally in early premarket trade following better-than-expected confidence data in the eurozone and a strong day Wednesday on the "tapering of the tapering" trade. Investors are starting to believe the Fed's withdrawal from QE3 is further off given weaker data. However, some negative signs from within the U.K. GDP report echoed fears raised by the U.S. GDP revisions Wednesday.
In other news around the markets, the Eurozone Economic Confidence Index for June rose to 91.3 from 89.4 in May, beating the consensus forecast of 90.3. Industrial and consumer sentiment improved in the month, while the services sentiment dropped.
The U.K. economy grew 0.3% in the first quarter, in line with forecasts, but only 0.3% from the first quarter a year ago, below the forecast of 0.6% growth. Further, real disposable income in the first quarter fell 1.7% from the fourth quarter, the largest quarterly drop in 26 years.
The number of unemployed unexpectedly dropped in Germany by 12,000 vs. an expected rise of 8,000 in June. The unemployment rate was 6.8%, slightly better than the forecast 6.9%, as May's unemployment rate was revised down to 6.8% from 6.9%.
- S&P 500 futures rose 2 points to 1,597.50, but strong technical resistance sits above near 1,602.
- The EUR/USD was higher at 1.3030.
- Spanish 10-year government bond yields fell 5 basis points to 4.8%.
- Italian 10-year government bond yields fell 5 basis points to 4.65%.
- Gold rose 0.64% to $1,237.70.
Asian shares were mostly stronger overnight, except for Chinese stocks, as Japanese markets had a strong day on little news. The Nikkei 225 Index gained 2.96%, and the Topix Index rose 2.76%. In Hong Kong, the Hang Seng Index gained 0.5%, while the Shanghai Composite Index slipped 0.08% in China. Also, the Korean Kospi rose 2.87%, and Australian shares rose 1.68% as the country awaits the new government.
European shares were mixed overnight as Spanish stocks plunged. The Spanish Ibex Index declined 1.29% dragging Italy's FTSE MIB Index lower by 0.26%. Meanwhile, the German DAX fell 0.03%, the French CAC 40 slipped 0.17% and U.K. shares rose 0.34%.
Commodities were mostly higher overnight as precious metals recovered some of the large losses. WTI crude futures rose 0.34% to $95.82 per barrel and Brent crude futures rose 0.52% to $102.19 per barrel. Copper futures rose 0.87% to $306.70 per pound. Gold was higher, and silver futures gained 0.63% to $18.73 per ounce.
Currency markets were once again rather quiet overnight as currency pairs traded in tight bands. The EUR/USD was higher at 1.3030, and the dollar rose against the yen to 98.06. Overall, the Dollar Index fell 0.11% on weakness against the euro and the Canadian dollar despite strength against the yen, the pound and the Swiss franc.
Key companies that reported earnings Wednesday include:
- General Mills (GIS) reported fourth-quarter EPS of 53 cents, in line with estimates, on revenue of $4.41 billion vs. $4.32 billion expected. The company also raised estimates for the full year 2014 and expects EPS of $2.87 to $2.90 vs. the Wall Street forecast of $2.93.
- Monsanto (MON) reported third-quarter EPS of $1.66 vs. $1.61 expected on revenue of $4.25 billion vs. $4.42 billion estimate.
- Bed Bath & Beyond (BBBY) reported first-quarter EPS of 92 cents vs. 93 cents expected on revenue of $2.61 billion vs. $2.6 billion estimated. The company also sees Q2 EPS between $1.11 and $1.16 vs. the $1.14 estimate.
- Progress Software (PRGS) reported second-quarter EPS of 27 cents vs. 22 cents expected on revenue of $81.7 million vs. $79.04 million estimated.
Notable companies expected to report earnings Thursday include:
- Accenture (ACN) is expected to report third-quarter EPS of $1.13 vs. $1.03 a year ago on revenue of $7.42 billion vs. $7.15 billion a year ago.
- ConAgra Foods (CAG) is expected to report fourth-quarter EPS of 59 cents vs. 51 cents a year ago on revenue of $4.61 billion vs. $3.41 billion a year ago.
- KB Homes (KBH) is expected to report a second-quarter loss of 7 cents per share vs. a loss of 31 cents per share a year ago on revenue of $450.8 million vs. $302.85 million a year ago.
- Nike (NKE) is expected to report fourth-quarter EPS of 75 cents vs. 59 cents a year ago on revenue of $6.64 billion vs. $6.47 billion a year ago.
- Shaw Communications (SJR) is expected to report third-quarter EPS of 44 cents vs. 53 cents a year ago on revenue of $1.31 billion vs. $1.28 billion a year ago.
On the calendar Thursday, after weekly jobless claims and the PCE price index, pending home sales and the Kansas City Manufacturing Index will be out. Speeches from three Fed members are also expected as well as a 7-year note auction. Overnight, Japanese industrial production, German retail sales, and the Spanish budget statement are due out.
More from Benzinga:
Tune into Benzinga's PreMarket Info show with Dennis Dick and Joel Elconin here.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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