Stock futures rise as housing starts rise above forecasts; Deere reports strong earnings
NEW YORK (AP) — Stock futures rose modestly Wednesday as investors bet a new round of upbeat earnings and economic reports will provide further evidence of a rebound.
Overseas markets rose following upbeat earnings in Europe from companies including French bank BNP Paribas.
Investors turned their attention from concerns overseas to domestic growth Tuesday, and sent stocks sharply higher. A better-than-expected report on housing construction and strong earnings from Deere & Co. should keep traders focused on the U.S. economy for at least another day.
The Commerce Department said construction of new homes and apartments rose to an annual rate of 591,000 in January, better than the 580,000 units forecast by economists polled by Thomson Reuters.
A collapse of the housing market helped push the economy into recession, but recent reports on the sector have showed some signs of stability. Applications for building permits, a barometer of future activity, fell 4.9 percent to a rate of 621,000. However, a decline was expected after two months of big growth.
Ahead of the opening bell, Dow Jones industrial average futures rose 44, or 0.4 percent, to 10,285. Standard & Poor’s 500 index futures rose 6.50, or 0.6 percent, to 1,099.70, while Nasdaq 100 index futures rose 10.00, or 0.6 percent, to 1,809.25.
Deere continued a run of strong earnings reports this week. The heavy equipment maker reported a much better than expected fiscal first-quarter profit, and raised its full-year earnings outlook. Shares surged $4.04, or 7.5 percent, to $57.82 in pre-opening trading.
Meanwhile, Walgreen Co. said it will purchase New York-area drugstore operator Duane Reade in a deal valued at about $1.08 billion including debt.
Investors will also get a reading on industrial production, which is expected to show production at the nation’s factories, mines and utilities rose 0.6 percent last month. That would be the the seventh consecutive month of growth.
The Federal Reserve Board will also release minutes from its meeting last month.
Stocks rose sharply Tuesday after better-than-expected earnings from companies like Barclays PLC, Merck & Co. and Abercrombie & Fitch provided reassurances that the economy is improving.
Simon Property Group’s takeover bid of rival mall operator General Growth Properties also provided signs companies are getting more confident in a rebound.
Stocks had been dragged down in recent weeks because of overseas concerns — mainly worries about debt problems in Greece spreading and upending a recovery and China slowing down bank lending to prevent speculative bubbles. Those concerns appear to have eased somewhat, allowing investors to again focus on the domestic economy.
The Dow Jones industrial average soared nearly 170 points, or 1.7 percent, on Tuesday. The Standard & Poor’s 500 index rose 1.8 percent, while the Nasdaq composite index jumped 1.4 percent.
Meanwhile, bond prices fell Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.70 percent from 3.66 percent late Tuesday.
The dollar rose modestly against other major currencies. Gold prices dipped, while oil rose.
Overseas, Japan’s Nikkei stock average rose 2.7 percent. Britain’s FTSE 100 gained 0.9 percent, Germany’s DAX index rose 1.4 percent, and France’s CAC-40 jumped 2 percent.