Futures higher on strong European services data

US stocks are set to track global markets up ahead of US service sector data.

By Benzinga Mar 5, 2013 9:37AM
stock market fotostocksBy Matthew Kanterman

U.S. equity futures rallied in early premarket trade following stronger than expected non-manufacturing PMI data from the eurozone and the U.K.

The eurozone services PMI rose to 47.9 in February from 47.3 in January, topping expectations of a flat reading month-over-month. Also, the U.K. non-manufacutring PMI rose to 51.8 from 51.5 in January, beating expectations of a reading of 51.

In other news, the Reserve Bank of Australia kept rates on hold at 3.00%. The accompanying statement was slightly more optimistic on the global economy despite recent poor Chinese data. The Bank said there is room for more accommodative policy.

European regulators issued a statement overnight indicating that Spain's bank reform plan is on track so far, and that the Bad Bank plan is working.

The China HSBC services PMI confirmed the official non-manufacturing PMI released over the weekend by falling to 52.1 in February from 54 in January. However, it is yet to be seen if this slowdown i growth is due to transitory effects emanating from the Lunar New Year Holiday.
  • S&P 500 futures rose 3.60 points to 1,529.30.
  • The EUR/USD was higher at 1.3043.
  • Spanish 10-year government bond yields fell to 5.06%.
  • Italian 10-year government bond yields fell to 4.77%.
  • Gold rose 0.53% to $1,580.80 per ounce.
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Asian markets
Asian shares were higher in overnight trade following large losses Monday. The Japanese Nikkei Index rose 0.27% and the Shanghai Composite Index rose 2.33% while the Hang Seng Index gained 0.1%. Also, the Korean Kospi rose 0.17% and Australian shares rallied 1.29% following the RBA rate decision.

European markets
European shares were higher following the stronger than expected services PMI data. The Spanish Ibex Index rose 1.19% and the Italian FTSE MIB Index gained 1.86%. Meanwhile, the German DAX rose 1.67% and the French CAC gained 1.38% and U.K. shares added 0.73%.

Commodities were stronger overnight after oil touched a new 2013 low Monday. WTI crude futures rose 0.31% to $90.41 per barrel and Brent crude futures rose 0.57% to $110.72 per barrel. Copper futures rose 0.63% to $352.40 following the RBA decision. Gold was higher and silver futures gained 1.35% to $28.88 per ounce.

Currency markets showed broad sterling strength overnight as the yen strengthened as well. The EUR/USD was higher at 1.3043 and the dollar fell against the yen to 93.13 while the pound rose to 1.5168 against the dollar. Overall, the Dollar Index fell 0.2% on weakness against the pound, the yen, and the euro.

Premarket movers
Stocks moving in the premarket included:
  • Marathon Petroleum (MPC) shares rose 0.12% premarket after the stock climbed 5.62% Monday to a new all-time high. The stock has more than doubled in the last 52-weeks.
  • United States Steel (X) shares rose 1.25% premarket on bullish options market activity.
  • Berkshire Hathaway (BRK.A) (BRK.B) rose 0.93% premarket as Warren Buffett has indicated that he is "on the hunt for more elephants."
  • J.C. Penney (JCP) shares fell 1.43% premarket on reports that a large shareholder is set to sell a 10 million share block.
Notable companies expected to report earnings Tuesday include:
  • Checkpoint Systems (CHP) is expected to report fourth quarter earnings per share of $0.17 vs. a loss of $0.10 per share a year ago.
  • Qihoo 360 Technology (QIHU) is expected to report fourth quarter earnings per share of $0.17 vs. $0.20 a year ago.
  • Smith and Wesson Holding (SWHC) is expected to report third quarter earnings per share of $0.23 vs. $0.07 a year ago.
On the economics calendar Tuesday, chain store sales and the Redbook are due out followed by the ISM non-manufacturing index, the first major indicator ahead of Friday's payrolls report. Also, the Treasury is set to auction four- and 52-week bills and the Fed's Jeffrey Lacker is set to speak.

Overnight, Australian and eurozone GDP data are due out. Also, a speech from Bank of England Governor Mervyn King as well as a German five-year bond auction should move markets.

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