Futures point to gains after data and Caterpillar
By Ryan Vlastelica | January 29, 2013 12:56 AM EST
Stock index futures pointed to a modestly higher open on Monday following strong data and results from Caterpillar, though gains were slight after a rally that took the S&P 500 above 1,500 for the first time in more than five years.
A strong start to the earnings season has boosted equities, with major averages rising for four straight weeks. The S&P has gained for eight straight days, its longest winning streak in eight years.
"You can't find more of a global bellwhether than Cat, and people are pleased with the number, which suggests there could be less concern about slowing growth in China after this," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York.
Thomson Reuters data through Friday showed that of the 147 S&P 500 companies that have reported earnings so far, 68 percent exceeded expectations. Since 1994, 62 percent of companies have topped expectations, while the average over the past four quarters stands at 65 percent.
S&P 500 futures rose 2 points and were about even with 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 22 points and Nasdaq 100 futures rose 2 points.
The S&P 500 closed at its highest since December 10, 2007, and the Dow ended at its highest since October 31, 2007. Over the past four weeks, the S&P has jumped 7.2 percent, suggesting markets may be vulnerable to a pullback if news disappoints.
Durable goods jumped 4.6 percent in December, a pace that far outstripped expectations for a rise of 1.8 percent.
"We continue to have a parade of better-than-expected economic reports. All-in-all it's a good picture. I think there's a good chance we've reached a point of recognition where people don't think the economy will crater," Kaufman said.
In addition to earnings, equities have also risen on an agreement in Washington to extend the government's borrowing power. On Monday, Fitch Ratings said that agreement removed the near-term risk to the country's 'AAA' rating.
Previously, the agency said the lack of an agreement would prompt a review of the sovereign rating.
In company news, Keryx Biopharmaceuticals Inc
Bargain hunters may look to Apple Inc in the first session after the tech giant lost its coveted title as the largest U.S. company by market capitalization to Exxon Mobil Corp
"Apple is pretty attractive right now, so you may see an opportunity here," said Chris Bertelsen, who helps oversee $1.5 billion as chief investment officer of Global Financial Private Capital in Sarasota, Florida. "Those who think the stock is dead have made a big mistake."
U.S. stocks rose on Friday, lifted by strong results from such companies as Procter & Gamble
(Editing by W Simon and Kenneth Barry)
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