Stock Futures Point To A Rebound
U.S. stock futures were pointing to a rebound Tuesday after the major indices staged their biggest drop in more than a week during the prior session.
Futures for the Dow Jones Industrial Average were gaining 64 points, or 41.7 points above fair value, at 12,374. Futures for the S&P 500 were up 5.5 points, or 3.8 points above fair value, at 1306, and futures for the Nasdaq 100 were rising 11.3 points, or 9.7 points above fair value, at 2521.
U.S. stocks shed more than 1% Monday, as initial excitement about Spain’s bank bailout plan was usurped by worries over the country’s increasing debt load. Uncertainty surrounding the outcome of this weekend’s elections in Greece also soured sentiment.
Market sentiment was bumped higher Tuesday morning amid some stimulus chatter.
Federal Reserve Bank of Chicago President Charles Evans said in an interview with Bloomberg TV he is in favor of “pretty much any accommodative policy,” and said that extending Operation Twist would be “useful.”
Economists at Capital Economics noted that unless the economy loses a lot more momentum or the financial contagion from the Europe debt crisis turns out to be much greater than expected, a third round of Fed quantitative easing is unlikely.
The economists added that the Fed may respond to the weaker tone of the incoming data by announcing a short extension to its Operation Twist program at next week’s Federal Open Market Committee meeting.
The FTSE in London was edging up 0.5% and the DAX in Germany was adding 0.8%.
The benchmark 10-year Treasury was shedding 7/32, raising the yield to 1.613%. The dollar was off by 0.2%, according to the dollar index.
The Bureau of Labor Statistics reported that U.S. import prices fell 1% in May, as expected, after no change the previous month. Lower fuel and non-fuel prices contributed to the May decrease in overall import prices. Export prices also declined in May, falling 0.4% after a 0.4% increase in April.
“Overall, a modest read on inflation pressure — keeping with the trend as energy prices continue to decline,” said Ian Lyngen senior bond strategist at CRT Capital.
The Treasury Department’s budget report for last month will be released at 2 p.m. EDT.
Hong Kong’s Hang Seng index settled down 0.4% on Tuesday and the Nikkei in Japan shed 1%.
July crude oil futures were down by 21 cents at $82.49 a barrel. August gold futures were sliding $4.50 to $1,592.30 an ounce.
In corporate news, Michael Kors (KORS), the women’s apparel maker, reported fourth-quarter net income Tuesday of $43.6 million, or 22 cents a share, up from year-earlier earnings of $17.4 million, or 10 cents a share.
Excluding a credit related to the company’s initial public offering, Michael Kors had fourth-quarter net income of $41.6 million, or 21 cents a share. Fourth-quarter revenue was $380 million.
Analysts, on average, expected Michael Kors to post fiscal fourth-quarter earnings of 16 cents a share on revenue of $360.9 million.
The retailer also said it expects first-quarter earnings of between 18 cents a share and 20 cents a share, and full-year profit of between $1.08 and $1.12 a share. Analysts expect first-quarter profit of 17 cents a share and fiscal-year earnings of 98 cents a share.
Michael Kors shares rose 12.62% in premarket trading Tuesday to $43.
Juniper Networks (JNPR), the networking equipment maker, announced a new $1 billion buyback authorization.
Shares of Juniper Networks rose 2.13% in premarket trading Tuesday to $16.75.
Chipmaker Texas Instruments (TXN) raised the low end of its second-quarter revenue and earnings estimates.
Texas Instruments, the silicon specialist, forecast revenue of between $3.28 billion and $3.42 billion, compared with prior guidance of $3.22 billion to $3.48 billion. Analysts are expecting sales of $3.35 billion.
The company said it now expects earnings of between 32 cents and 36 cents a share compared with a previous estimate of 30 cents to 38 cents. Analysts expect 41 cents a share.
Seagate Technology (STX), the hard drive maker, saw shares rise Monday after David Einhorn of Greenlight Capital disclosed ownership of more than 23 million shares, or a 5.4% stake, in the company. That’s an increase from the 14.5 million shares, or 3.4% stake, that Einhorn disclosed as of March 31.