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Stock futures gain amid supportive central banks, data due



By Ryan Vlastelica
04 April 2013 @ 10:16 pm AEST

NEW YORK -

Stock index futures rose on Thursday, signaling a rebound from the previous session's steep loss, as aggressive action by the Bank of Japan and supportive comments by U.S. officials indicated continued support for the market.

The rise in futures wasn't enough to indicate that the benchmark S&P 500 would reach a new all-time intraday peak at the open. The index has struggled to reach its record 1,576.09 level, which has acted as resistance. It is now 1.4 percent away from that high.

Wall Street has advanced almost 9 percent this year, partially fueled by a supportive environment from central banks around the world, a trend investors expect to continue.

On Wednesday, St. Louis Fed President James Bullard said the Federal Reserve had room to keep buying bonds to support the U.S. economic recovery as inflation remains low.

Early on Thursday, Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, made comments suggesting the Fed's bond-buying program would continue for at least a few more months until there was "solid evidence that the recovery is moving ahead.

The Bank of Japan shocked markets with a radical overhaul of its monetary policy, adopting a new balance sheet target and pledging to double its government bond holdings in two years. Japanese shares <.N225> soared 2.2 percent.

"The sweeping policy changes from Japan, as well as the comments here, are helping to give us a little bit of a bid," said Art Hogan, managing director of Lazard Capital Markets in New York.

Equities fell sharply on Wednesday, with the S&P posting its biggest daily decline since February 25, as weaker-than-expected data on the services sector and private sector employment raised concerns that Friday's jobs report could also point to weakness in the economy. That report is seen showing 200,000 jobs added in March, down from the previous month.

"We've had several pieces of data in a row that were weak, which suggests a market with more headwinds than tailwinds," Hogan said. "If Friday's report is better than expected, then the sentiment could turn back into positive territory, but if it is confirmation that things are softening, that could be the beginning of a pullback."

The weekly jobless claims report is due at 8:30 a.m. EDT. Claims are seen falling to 350,000 from 357,000 in the previous week.

Investors have used market declines as buying opportunities, and if that continues, energy shares could be among the most active on Thursday as they rebound from a steep decline in the previous session.

S&P 500 futures rose 7.2 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 49 points and Nasdaq 100 futures rose 11.25 points.

Many market participants see limited upside potential ahead of Friday's payroll report, with the upcoming earnings season viewed as another potential catalyst.

However, first-quarter earnings forecasts have been lowered since the start of the year, with S&P 500 company earnings now expected to have risen 1.6 percent compared with a year ago, according to Thomson Reuters data. A January 1 forecast put earnings growth at 4.3 percent.

The Dow Jones Transportation Average <.DJT>, seen as a barometer of economic activity, fell more than 1 percent on Wednesday and closed below its 50-day moving average for the first time since November 21.

Geopolitical issues will remain in view following news that the Pentagon was sending a missile defense system to Guam in the coming weeks, as well as remarks by Defense Secretary Chuck Hagel that North Korea posed a "real and clear" danger.

In corporate news, private equity firms TPG Capital and Madison Dearborn Partners are the two finalists bidding for National Financial Partners , a New York-based wealth management company with a market value of nearly $900 million, people familiar with the matter said.

(Editing by Bernadette Baum)

Copyright 2009 Thomson Reuters. All rights reserved.

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