US Stocks Futures edge higher, after two-day decline

by **hlk** Sat 02 Nov 2013, 15:36

Business & Markets 2013
Written by Reuters
Friday, 01 November 2013 20:43
A + A - Reset
(01/11/13 20:01:39)
* Major indexes coming off two days of losses
* First Solar jumps after results, outlook
* ISM manufacturing index on tap, seen edging lower
* Futures up: Dow 39 pts, S&P 3.4 pt, Nasdaq 7.5 pts
NEW YORK (Nov 1): U.S. stock index futures edged slightly higher on Friday,
indicating a Wall Street rebound following two days of losses, spurred by
concerns over Federal Reserve policy.
Equities have been pressured since a Fed statement on Wednesday, raised
concerns about when the central bank would begin to scale back its stimulus
program, which has contributed to the S&P 500's advance of 23 percent this
year.
The rally this year has taken the Dow and S&P repeatedly to record highs,
leading some analysts to call for a pullback, especially amid some signs of
slowing growth, like weak economic data and an earnings season marked by
tepid revenue.
"Investors continue to buy the dips, as they believe the Fed will hold steady for
a while, and that's helping to give us a bounce today," Robert Pavlik, chief
market strategist at Banyan Partners LLC in New York, said.
"I would be somewhat cautious about reentering the market so quickly, since
there still are headwinds out there and we haven't pulled back very much from
our highs."
Investors await the Institute for Supply Management's October read on manufacturing, due at 10:00 a.m. EDT (1400 GMT). The index is
seen falling to 55, from 56.2 in the previous month. Results from Chevron Corp are also on tap.
Recent economic data has been mixed, with the most recent ADP National Employment Report coming in below expectations, but the
Chicago Purchasing Manager's Index sharply above forecasts. While weak data has been a concern, strong data has spurred selling, on
expectations that it may encourage the Fed to slow its stimulus — something the central bank has said it would do, once growth meets its
targets.
S&P 500 futures rose 3.4 point and were above fair value — a formula that evaluates pricing by taking into account interest rates,
dividends and time to expiration on the contract. Dow Jones industrial average futures added 39 points, and Nasdaq 100 futures rose 7.5
points.
For the week thus far, both the Dow and S&P are down 0.2 percent, coming off three straight weeks of gains, while the Nasdaq has
slipped 0.6 percent.
In its statement, the Fed said it would keep buying $85 billion of bonds per month, but removed a phrase from a previous statement,
expressing worries about credit conditions, which some investors interpreted as a sign that the Fed could begin tapering earlier than
expected. Previously, market participants were anticipating that the stimulus plan would not change, until at least early next year.
In company news, American International Group Inc reported third-quarter earnings late Thursday, that slightly beat expectations, though
analysts had expected better results in the insurer's consumer lines business.
Solar companies will be in focus, after First Solar Inc posted results that beat expectations and raised its full-year profit outlook. Shares
jumped 8.3 percent to $54.50, in premarket trading.
With about 71 percent of S&P 500 companies having reported, 68.2 percent have topped Wall Street's expectations — above the
long-term average of 63 percent, according to Thomson Reuters data. However, only 53.6 percent have topped revenue forecasts —
below the 61 percent average since 2002.
"Earnings have generally been positive, but it isn't impressive that companies are able to meet lowered expectations," Pavlik said. "The
weak revenue is concerning."
U.S. shares of Vodafone Group edged 0.1 percent lower to $36.81, following a Bloomberg report which said AT&T Inc was exploring
strategies for a potential takeover of the British mobile operator, citing people familiar with the matter.