Stock futures point to higher opening

NOV 24, 2009
Stock futures pointed to a higher open Wednesday as investors prepared to examine fresh data on consumer spending and sentiment, new home sales and the job market a day after the Federal Reserve provided a more upbeat view of U.S. economic prospects. Overseas markets moved higher, lifted by the expectation that interest rates will remain low. Investors have been sending stock prices higher over the week. Record-low interest rates and the resulting slide in the dollar have been major forces behind the recent surge in stocks. Traders are entering trading Wednesday looking for further signs of economic recovery. New filings for unemployment benefits likely will show a slight improvement while analysts expect consumer spending rebounded in October after an auto-related plunge in September. Sales of new homes are also expected to grow, propelled by first-time buyers taking advantage of a special tax credit. Even with signs of strength, economists worry the recovery could falter if consumer spending, which makes up 70 percent of economic activity, drops in the face of unemployment that is already at the highest point in 26 years and is expected to keep rising. Economists expect a Commerce Department report on personal income and spending to show that spending rose 0.5 percent in October after falling 0.5 percent in September, according to Thomson Reuters. Income is expected to rise 0.2 percent after being flat in September. Later in the day, the Reuters/University of Michigan's final report on consumer sentiment in expected to be revised up to 67 from a preliminary reading of 66, but will still be below the October reading of 70.6. Investors will also get an update on the job market when the Labor Department releases its weekly report on first-time claims for unemployment benefits. Economists expect that claims ticked down by 5,000 to a seasonally adjusted 500,000 last week, from 505,000 the previous week. Ahead of the opening bell, Dow Jones industrial average futures rose 39, or less than 0.4 percent, to 10,444. Standard & Poor's 500 index futures rose 4.70, or 0.4 percent, to 1,107.80, while Nasdaq 100 index futures rose 8.50, or 0.5 percent, to 1,795.00. Investors will also get data on new home sales for October. The Commerce Department is expected to report that sales rose to a seasonally adjusted annual rate of 410,000, up from September's rate of 402,000. The report is scheduled to be released at 10 a.m. A weakening dollar has bolstered commodities and stocks of energy and materials companies, helping drive shares higher in recent weeks. The dollar was mostly lower Wednesday against other major currencies, while gold prices rose. Meanwhile, bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.32 percent from 3.31 percent late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.05 percent from 0.03 percent. Overseas, Japan's Nikkei stock average rose 0.4 percent. Britain's FTSE 100 rose 0.6 percent, Germany's DAX index rose 0.5 percent, and France's CAC-40 rose 0.6 percent.

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