In the U.S.: Stock Futures Rise Before Housing Data

24 February 2012


Optimism appears to be the Friday theme, as housing starts are on the rise.

U.S. stock-index futures gained, indicating the Standard & Poor’s 500 Index will advance for a second day, as investors awaited reports on new home sales and consumer sentiment and after American International Group Inc. (AIG) posted earnings.

AIG, Omnivision Technologies Inc. (OVTI) and Salesforce.com Inc. (CRM) rose after reporting profit that beat analysts’ estimates. Crocs Inc. and Deckers Outdoor Corp (DECK) fell after earnings missed forecasts.

Standard & Poor’s 500 Index (SPH2) futures expiring in March added 0.3 percent to 1,367.30 at 12:16 p.m. in London. Dow Jones Industrial Average futures increased 29 points, or 0.2 percent, to 13,0038. The benchmark Standard & Poor’s 500 Index rose 0.4 percent yesterday as reports on American jobs and housing beat projections.

“U.S. consumer confidence has rebounded strongly since the middle of 2011 and the market expects that trend to continue,” Connall Mac Coille, an economist at Dublin-based securities firm Davy, wrote in a note. “New home sales data are expected to rise following a raft of positive news on the U.S. housing market. Both data releases could have the potential to reinforce markets’ positive sentiment on the US economy.”

Purchases of new homes in the U.S. probably rose in January to a nine-month high, providing more evidence the housing market is improving, economists said before a Commerce Department report due at 10 a.m. in Washington. Economists’ forecasts ranged from 300,000 to 355,000.

Consumer Sentiment

The Thomson Reuters/University of Michigan final index of consumer sentiment fell to 73 in February from 75 a month earlier, according to the Bloomberg survey median. The preliminary reading for this month was 72.5. The report is due at 9:55 a.m.

AIG rose 7 percent to $30.00 in early New York trading. AIG’s biggest unit, property-casualty insurer Chartis, and its plane-leasing business swung to operating profits in the period, the New York-based company said in a statement yesterday as it posted net income of $19.8 billion.

The insurer said it will generate enough profit to use tax assets, tied to prior losses, that can limit future payments to the government.

Of the 434 S&P 500 companies that have reported results since Jan. 9, 296, or 68 percent, have posted per-share earnings that beat projections, according to data compiled by Bloomberg.

Omnivision Technologies surged 12 percent to $18 in early trading in New York after the primary supplier of camera sensors for the iPhone 4S projected fourth-quarter earnings of at least 15 cents a share, exceeding the average 12-cent profit predicted by analysts.

Salesforce.com Rises

Salesforce.com added 9.5 percent to $144.30 in early trading in New York. The largest seller of online customer- management software reported profit and sales that topped analysts’ estimates after the company added features and pushed into social media. Apple Inc. rose 0.7 percent to $520 in early trading in New York. Chief Executive Officer Tim Cook said at a shareholder meeting yesterday the company is exploring how to use its $97.6 billion in cash in investments.

Marvell Technology Group Ltd. (MRVL) rose 0.7 percent to $16.16 in late trading in New York after posting fourth-quarter earnings- per-share of 21 cents, beating analyst estimates of 17 cents.

Crocs Inc. (CROX), the plastic-clogs maker, plunged 9.5 percent to $18.48 in early New York trading, after it forecast first- quarter earnings of no more than 26 cents a share, below the average 30-cent profit estimated by analysts.

Deckers Outdoor Corp., the maker of Ugg boots and Teva sandals, fell 14 percent to $77.85 inGermany after it said earnings in 2012 will be unchanged from last year at $5.07 a share, below the average analyst estimate of $5.80.

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