US STOCKS-Futures edge up after selloff; Yellen testimony on tap

Wed May 7, 2014 7:51am EDT

* Twitter bounces in premarket after Tuesday drop

* Whole Foods tumbles after earnings, outlook

* Yellen congressional testimony due

* Futures up: Dow 37 pts, S&P 3.9 pts, Nasdaq 6.75 pts

By Chuck Mikolajczak

NEW YORK, May 7 (Reuters) - U.S. stock index futures edged up on Wednesday, following the biggest drop in the S&P 500 since mid-April, as earnings season began to wind down and ahead of congressional testimony from Federal Reserve Chair Janet Yellen.

* U.S. stocks fell on Tuesday, closing at session lows as the S&P 500 suffered its biggest percentage decline since April 11. AIG dragged on financial shares after disappointing earnings and a slide in Twitter hurt other names in the technology and internet space. Twitter shares rebounded in premarket trading Wednesday, adding 1.5 percent to $32.32.

* Over 20 S&P 500 companies are scheduled to report earnings on Wednesday. Whole Foods Market Inc tumbled 16.8 percent to $39.90 in premarket trading after the organic grocer posted second-quarter results and cut its 2014 outlook on Tuesday.

* Testimony from Fed Chair Yellen to the Joint Economic Committee, scheduled for 10:00 a.m. (1400 GMT), will be closely monitored. While Yellen is largely expected to maintain a dovish policy stance, investors will be searching for clues on how soon interest rates will be raised, which many expect to see beginning in 2015.

* According to Thomson Reuters data through Tuesday morning, of 397 companies in the S&P 500 that have reported earnings, 67.5 percent beat expectations, above the 63 percent average since 1994 and 66 percent beat rate for the past four quarters.

* Profits are now expected to rise 4.6 percent this quarter, down from the 6.5 percent growth rate estimated at the start of the year, but above the low of 0.6 percent in mid-April, according to Thomson Reuters data.

* S&P 500 e-mini futures rose 3.9 points 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 e-mini futures gained 37 points and Nasdaq 100 e-mini futures added 6.75 points.

* Economic data expected on Wednesday includes the preliminary first quarter reading on productivity and labor costs at 8:30 a.m. EDT (1230 GMT). Expectations are for a 1 percent decline in productivity after the final fourth quarter reading was revised sharply lower to growth of 1.8 percent.

* Electronic Arts surged 19.3 percent in light premarket trading after the video game publisher posted quarterly profit and revenue that beat expectations late Tuesday.

* European stocks edged lower, as Tuesday's selloff on Wall Street unsettled investors and results from brewer Carlsberg and bank Societe Generale showed the Ukraine crisis was starting to hurt large Western companies.

* Asian shares stumbled to a one-month low as the heightened possibility of Ukraine slipping into civil war depressed risk appetite. (Reporting by Chuck Mikolajczak; Editing by Bernadette Baum)

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