U.S. Stocks To Post Gains At Opening; Cisco In Focus
NEW YORK (MarketWatch) -- U.S. stocks are set to open at higher levels Wednesday, bolstered by a higher revenue outlook from Cisco Systems as well reassuring assessments about economic growth and the credit markets from the Federal Reserve.
The futures contract for the Dow Jones Industrial Average last was up 37 points at 13,585.
Futures contracts for the S&P 500 and the Nasdaq 100, respectively, were up by 6.9 points at 1,489.30 and by 10.2 points at 1,984.2
On Tuesday, stocks managed to close higher in a back-and-forth session, after investors eventually adopted a positive reaction to the Fed's decision to hold interest rates steady and retain a bias toward keeping the fight against inflation as its top priority. The statement also made prominent reference to the credit markets' recent turmoil.
Investors should remain in a constructive frame of mind at Wednesday's opening.
"The fact that the Federal Reserve mentioned the credit markets' problems in its statement is reassuring to the market," said Art Hogan, chief market strategist at Jefferies & Co. "They acknowledged that the market's worries are on their minds."
Overnight, the Reserve Bank of Australia upped its key rate by a quarter of a percentage point, to 6.5%, and said credit-market developments "to date don't appear to have changed significantly the broader global outlook."
And the Bank of England, another central bank that has raised interest rates recently, said inflation may hit its target by the end of 2008.
As for U.S. economic data, wholesale trade figures for June are due at 10 a.m. Eastern time. Investors will also keep an eye out for the weekly updates on U.S. petroleum inventories, due out at 10:30 a.m. Eastern.
Stocks on the move
Shares of Cisco moved 6% higher before the open, playing off the technology bellwether's upwardly revised outlook.
The networking giant late Tuesday reported a 25% jump in fourth-quarter profit. Bear Stearns upgraded the stock to outperform from peer perform on the back of the report.
Later in the day, General Motors Corp. will make a presentation to analysts.
Also in the headlines, Sprint Nextel reported a 95% drop in second-quarter net earnings as a result of higher costs and expenses and a lower contribution from operations, though underlying profit of 25 cents a share came in ahead of analysts' 22-cent average forecast.
Other markets
The expected gains in the stock market dented interest in Treasurys. The benchmark 10-year note last was down 11/32 at 97 18/32 with a yield of 4.812%.
In currencies, the dollar was mixed in early dealings, after Tuesday's Fed action. The greenback lately was up 0.3% at 119.24 yen as the euro rose 0.3% to $1.38.
Commodities futures moved higher in the early going. The September crude contract was up modestly at $72.36 a barrel, while the bench gold contract added 0.5% to stand at $685.80 an ounce.
By Leslie Wines