US STOCKS-Futures gain ahead of vote to cut deficit

Thu Jul 28, 2011 7:59am EDT

Related Topics



 * Republican debt plan faces close vote in U.S. Congress
 * US jobless claims, pending home sales data on tap
 * Futures up: S&P 3.3 pts, Dow 11 pts, Nasdaq 5.75 pts
 * For up-to-the-minute market news see [STXNEWS/US]
 (Adds quote, byline)
 By Angela Moon
 NEW YORK, July 28 (Reuters) - U.S. stock index futures rose
on Thursday after Wall Street suffered its worst day in eight
weeks, but the session was predicted to be volatile ahead of a
key vote later in the day on a bill to cut the U.S. deficit.
 The S&P 500 .SPX index fell 2 percent on Wednesday,
losing nearly 3 percent for the week, hit by weak earnings,
lackluster economic data and as U.S. politicians struggle to
agree over the nation's debt ceiling days before the deadline
to avoid default.
 A bill to cut the U.S. deficit faced a nail-bitingly close
vote in Congress on Thursday as the top Republican lawmaker
sought to quell an internal revolt and push his plan to avoid a
ruinous default. For details, see [ID:nN1E76R004]
 Approval of a plan by U.S. House of Representatives Speaker
John Boehner would break the inertia in Washington over a U.S.
debt crisis that has spooked markets and raised the prospect
that the government of the world's largest economy will run out
of money to pay its bills in less than a week. Concerns of a
possible downgrade of the U.S. credit rating have been weighing
on global equities.
 "While I think the odds are close to zero that the debt
ceiling doesn't get raised with a spending cut plan of some
sort, I can't say with any confidence, how the markets will
respond to a downgrade of the U.S. credit rating -- the credit
rating of the largest economy in the world with its currency as
the world's biggest medium of exchange and its level of
interest rates being considered the risk-free rate," said Peter
Boockvar, equity strategist at Miller Tabak in New York.
 Investors were also closely watching jobless claims data
due at 8:30 a.m.  (1230 GMT). If the number for the week ending
July 23 is near Wall Street's forecast of 415,000, it will mark
the 16th consecutive week that initial jobless claims hover
above 400,000.
 U.S. pending home sales probably fell about 2 percent in
June after two months of unusual volatility, which included an
11.3 percent drop in April followed by an 8.2 percent rebound
in May. The data is due at 10:00 a.m.
 S&P 500 futures SPc1 rose 3.3 points and were slightly
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 DJc1
were up 11 points, and Nasdaq 100 futures NDc1 gained 5.75
points.
 Exxon Mobil Corp (XOM.N), the world's largest publicly
traded oil company, is among several companies to report
results. High crude oil prices are expected to have boosted
second-quarter profits, but investors have been pressing the
company to deliver more cash to shareholders through a higher
dividend.
 Others due to report include Starbucks Corp (SBUX.O).
 Financial stocks were in focus as major European banks
announced jobs cuts. Swiss bank Credit Suisse (CSGN.VX) is
cutting about 2,000 jobs after a second quarter hit by weak
trading activity and the strong Swiss franc. [ID:nLDE76R02I]
 HSBC (HSBA.L) may cut more than 10,000 jobs as it embarks
on a cost-cutting drive, Sky News reported, citing people close
to Europe's biggest bank. [ID:nL3E7IS0KG]
 Ford Motor Co (F.N) plans to build a $900 million
production plant in India, doubling its investment in the
country, as the No. 2 U.S. carmaker seeks to catch up with
rivals in the second-fastest growing auto market in the world.
[ID:nL3E7IS0FS]
 (Editing by Padraic Cassidy)


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