Stock futures point to modest gains at open
By Ryan Vlastelica | February 14, 2013 1:00 AM EST
Stock index futures pointed to slight gains at the open on Wednesday, suggesting the market would continue a recent advance that lifted benchmark indexes to multi-year highs.
Equities have been strong performers of late, buoyed largely by healthy growth in corporate earnings, with the S&P 500 gaining 6.5 percent so far this year. The Dow is about 1 percent from an all-time intraday high, reached in October 2007.
Those gains could leave the market vulnerable to a pullback as investors take profit amid a dearth of new trading catalysts. While analysts continue to see an upward bias in markets, recent daily moves have been small and trading volumes have been light, with the S&P near its highest since November 2007.
"This is a market that refuses to go down, and the trend suggests that we'll not only hit a new high on the Dow, but move well beyond it," said Adam Sarhan, chief executive of Sarhan Capital in New York.
The S&P 500 was well over its 50-day moving average of 1,460.92, which was a sign the market was overbought, he said.
"A light-volume pullback should be expected and embraced at these levels," Sarhan said.
Industrial and construction shares will be in focus following President Barack Obama's State of the Union address on Tuesday, during which he called for a $50 billion spending plan to create jobs by rebuilding degraded roads and bridges. He also backed higher taxes for the wealthy.
Investors have cheered strength in recent company results, even as economic data, including recent reads on gross domestic product, have indicated weakening conditions.
Deere & Co
S&P 500 futures rose 2.5 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 13 points and Nasdaq 100 futures rose 8 points.
Companies scheduled to report quarterly results on Wednesday include MetLife Inc
According to the latest Thomson Reuters data, of 353 companies in the S&P 500 that have reported results, 70.3 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters.
Fourth-quarter earnings for S&P 500 companies are estimated to have risen 5.3 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.
Retail sales rose 0.1 percent in January, as expected, as tax increases and higher gasoline prices restrained spending. The data barely moved the futures market.
Also in economic news, business inventories are seen rising 0.3 percent in December, a repeat of the November increase. The data will be released at 10:00 a.m. ET (1500 GMT).
U.S. stocks closed modestly higher Tuesday as investors awaited President Barack Obama's State of the Union address.
(Editing by Bernadette Baum)
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