U.S. Stocks To Open Higher; Amazon, Boeing In View
NEW YORK (MarketWatch) -- U.S. stocks will attempt a recovery at Wednesday's opening, after suffering a major rout the day before, with strong earnings results from Amazon.com Inc. and a raised forecast from Boeing Co. likely to lend support.
But gains may be limited by ongoing concerns about the extent to which subprime lending problems are impacting prime loans and weakness in the junk bond sector.
The futures contract for the Dow Jones Industrial Average last was up 57 points at 13,870.
Futures contracts for the S&P 500 and the Nasdaq 100 were 6.40 points higher at 1,528.90 and up 7.2 points at 2,032.8.
The Dow industrials on Tuesday saw their worst one-day decline in four months, dropping 226 points after worse-than-expected DuPont results. There also were concerns about the financial sector in the wake of a warning from Countrywide Financial and growing bad debts at American Express.
On Wednesday the market will remain trained on credit market problems, earnings news, housing data and the Federal Reserve's latest survey of regional economies.
"Some earnings results are lifting the market before the opening," said Peter Cardillo, chief market analyst at Avalon Partners. "But the market is worried that subprime problems will spill over into the prime market. There is some evidence that this is happening, but not that much."
"So today's housing data and Beige book has the potential to calm the market's fears," he said.
Existing home sales data for June is due at 10 a.m. Eastern. The MarketWatch forecast, based on a poll of economists, is for 5.9 million sales, which would be down from 5.99 million in May.
Earlier the Mortgage Bankers Association said its index fell 3.6% for the week ended Jul-20 in data released earlier, along with a 5.0% drop in the purchase index and a 1.4% decline in the refinancing index.
The Fed's Beige Book will be released at 2 p.m. Eastern.
The Earnings Parade
Shares of online retailer Amazon.com soared 24% to $86 in premarket electronic trade after late Tuesday reporting earnings that were more than triple those booked a year before and 35% revenue growth. The company also received upgrades from Bear Stearns and Lehman Brothers.
Boeing Co. reported that its second-quarter net income rose to $1.1 billion, or $1.35 a share, from a loss of $160 million, or 21 cents a share in the year-ago period. The aerospace giant said revenue jumped 14% to $17 billion. The company's earnings beat expectations. The stock shot up 2.8% to $106.68 before the opening.
Xerox Corp. reported in a Securities and Exchange Commission filing that its quarterly earnings and revenue were a shade above expectations. It also upped is earnings outlook for the year.
Pharmaceutical company GlaxoSmithKline plc. reported earnings and revenue that did not meet analysts' expectations. The company softened the bad news by unveiling a new $25 billion buyback.
Colgate-Palmolive Co. reported a 47% jump in quarterly results and in-line earnings per share.
Corporate news
Wells Fargo & Co. plans to boost its quarterly dividend 11% to 31 cents a share.
Reynolds American Inc. also will raise its dividend. It plays a 13% increase to 85 cents a share.
Other markets
The expected gains in the stock market were helping to divert capital from the Treasury market. The benchmark 10-year note last was down 4/32 at 96-21/32 with a yield of 4.936%.
The dollar rose to a two-week high against the euro and gained against the yen early Wednesday, rebounding from multi-year lows it touched in the previous session. "Profit taking was the theme of the day," said Boris Schlossberg, senior currency strategist at DailyFX.com. "
The euro was last down 0.5% at $1.3745, while the dollar was up 0.3% at 120.46 yen.
Commodities were mixed in the early going. The front month crde contract last was up 6 cents at $73.62 a barrel as gold futures were $7.30 lower at $677.50 an ounce.
By Leslie Wines