BEFORE THE BELL: US Stock Futures Rally On Back Of HSBC Data

2nd Aug 2010 14:16

By Polya Lesova U.S. stock futures rallied on Monday, buoyed by strong earnings reports from HSBC Holdings and BNP Paribas, as investors awaited manufacturing data and comments on the economy from the Federal Reserve chairman. Futures on the Dow Jones Industrial Average jumped 124 points to 10541. S&P 500 futures rose 15.20 points, or 1.4%, to 1113.50 and Nasdaq 100 futures added 22 points to 1884.25. Stock futures tracked strong gains in Asian and European equity markets, which were fuelled by upbeat company earnings. The Dow ended marginally lower on Friday, but gained 7.1% in July, posting its first monthly gain since April. Disappointing economic news on second-quarter growth was somewhat offset by more upbeat reports on consumers and regional manufacturing. "Economic news is moving back into the lead position" for markets, said Marc Pado, market strategist with Cantor Fitzgerald in a note. The ISM manufacturing gauge for July will be released at 10 a.m., EDT. Shortly after that, Fed Chairman Ben Bernanke will start speaking about the economy. "Markets will be highly attuned to any further hints of quantitative easing following his dovish semi-annual testimony," said analysts at Action Economics. In the afternoon, Treasury Secretary Timothy Geithner will speak at New York University on the next steps for financial reform. On the corporate front, Humana Inc. (HUM) said its second-quarter net income rose to $2.00 a share from $1.67 a share. The firm also raised its full-year earnings guidance. NRG Energy Inc. (NRG) said its second-quarter net profit dropped to $211 million, or 81 cents a share, but the firm lifted its full-year adjusted earnings forecast. Loews Corp. (L) reported that its second-quarter net income rose to $366 million, or 87 cents a share, from $340 million, or 78 cents a share, in the same period a year ago. Analysts had expected earnings of 93 cents per share. Research in Motion Ltd. (RIMM) will also be in the spotlight after the United Arab Emirates announced Sunday that it plans to block the firm's BlackBerry services starting in October because of a dispute over the way the smartphone maker handles electronic data. Asian equities ended higher, as strong earnings outweighed disappointing data from China. The HSBC China Manufacturing Purchasing Managers Index, compiled by Markit, dropped to 49.4 in July from 50.4 in June--falling below the all-important 50-point level that separates expansion from contraction. The PMI survey last showed a contraction in March 2009. European shares posted sharp gains, with the Stoxx Europe 600 index up 2% in intraday trading. France's CAC-40 index advanced 2.1%, as banking group BNP Paribas (BNP.FR, BNPQY) reported a 31% surge in second-quarter profit, beating market expectations. BNP's shares rose 5.3% in Paris trading. Banking giant HSBC Holdings PLC (HBC) said its first-half net profit more than doubled to $6.76 billion, as loan impairments and other provisions fell to their lowest level since the start of the financial crisis. Shares of HSBC rallied 4.8% in London trading. Shares of Metro AG (MEO.XE), Germany's biggest retailer, fell 1.3% after the firm reported a decline in second-quarter net profit. In Greece, the ASE Composite stock index rallied 3.2% and the U.K. FTSE 100 index rose 2%. In the currency markets, the dollar index, which tracks the performance of the greenback against a basket of other major currencies, edged down 0.4% to 81.20. The British pound rose 1.2% to $1.5869, while the euro was up to trade at $1.31. September crude-oil futures gained $1.71 cents to $80.66 a barrel in electronic trading on the New York Mercantile Exchange. Gold futures rose $1.90 to $1,183.40 an ounce. -By Polya Lesova; 49 69 29725517; [email protected] (END) Dow Jones Newswires August 02, 2010 09:16 ET (13:16 GMT)