BEFORE THE BELL: US Stock Futures Higher; Inspired By Overseas Rally

6th Jul 2010 12:50

By Barbara Kollmeyer U.S. stock futures were higher Tuesday as traders return from a long holiday weekend, with hawkish comments from the Australian central bank supporting markets as well as a rally in Chinese and European stocks. Building on earlier gains, futures for the Dow Jones Industrial Average rose 93 points to 9689, while futures for the S&P 500 rose 11.10 points to 1025.40. Futures for the Nasdaq 100 rose 25.25 points to 1746.50. Ahead of the July 4 weekend, U.S. stocks got the third quarter off to a dismal start as investors got increasingly jittery about prospects for economic growth and revised down their outlook for corporate earnings. The Dow Jones Industrial Average logged its seventh straight drop, losing 46.05 points, or 0.5%, to 9686.48 on Friday for a weekly drop of 4.5%. The S&P 500 shed 4.79 points, or 0.5%, to end at 1022.58, off 5% from the prior Friday's close. The last such Monday-through-Friday slide happened from Oct. 6 through Oct. 10, 2008, when the S&P 500 tumbled just more than 18% in one week, one analyst pointed out last week. For Tuesday, stocks are facing a slightly cheerier backdrop, with gains in Europe and Asia. Focus will fall on the Institute for Supply Management's U.S. non-manufacturing gauge for June, due for release at 10 a.m., EDT. Lena Komileva, head of G7 market economics at Tullett Prebon, said the index has stabilized since March, but there are growing signs that this is the peak of the cycle, with new orders slowing markedly in the second quarter. "The early international services reports released from China, the euro zone and the U.K. on Monday showed a concerted slowdown in global demand conditions, which shows that once again global slowdown is tracking growing systemic stresses in the financial system, as was the case during the global recession in 2008," said Komileva, in a research note. Among stocks on the move, shares of BP PLC (BP) were up 6% in pre-open trade. The move came on the view that the battered stock may discount the costs of the Gulf of Mexico oil spill and lure new shareholders. Shares of Goldman Sachs Group Inc. (GS) rose nearly 2% in pre-open trade after J.P. Morgan Chase & Co. (JPM) upgraded the investment bank to overweight from neutral, saying it's "best in class managing" risk. In Europe, investors took a cue from upbeat Asian markets, and bought commodity producers after the Reserve Bank of Australia left key interest rates unchanged and said it sees the economy there growing, with no apparent alarm over the global growth backdrop. That news also lifted the Aussie dollar. Asia was higher, with Chinese stocks showing a technical bounce after recent sharp losses, but analysts said trade was very thinned out by the U.S. holiday. The Nikkei touched its lowest level since Nov. 27, 2009 before bouncing back. Gold futures were up $2.40 to $1,210.10 an ounce, while oil futures were up 76 cents to $72.90 a barrel. -By Barbara Kollmeyer; 34 91 395 8131; [email protected] (END) Dow Jones Newswires July 06, 2010 07:50 ET (11:50 GMT)