u.s. stock-index futures rise

U.S. Stock-Index Futures Rise; Tyco, Kodak Advance in Europe
May 4 (Bloomberg) --

U.S. stock-index futures gained as investors bet earnings growth will outweigh concerns that the Federal Reserve will need to keep raising interest rates.

``We are still very optimistic on U.S. equities given the great majority of companies are beating estimates,'' said Mariano Sancho, the head of capital markets at Riva y Garcia Gestion in Barcelona, Spain, which manages $480 million.

Tyco International Ltd. gained in Europe after second- quarter profit more than doubled. Eastman Kodak Co. rose on expectations it will report an increase in earnings today.

Standard & Poor's 500 Index futures expiring in June added 2.6 to 1314.90 at 11:17 a.m. in London. Dow Jones Industrial Average futures gained 11 to 11,445. Nasdaq-100 Index futures rose 6 to 1699.5.

About 69 percent of the 405 S&P 500 companies that have reported first-quarter earnings through yesterday beat analysts' estimates, more than the 57 percent average since 1992, data from Thomson Financial show.

A Labor Department report may show that worker productivity rebounded in the first quarter and growth in labor costs slowed, according to economists surveyed by Bloomberg News. That data may ease speculation that increasing wages will spur inflation.

U.S. stocks fell yesterday as signs of sustained economic growth reinforced expectations the central bank may boost borrowing costs to restrain inflation. The Standard & Poor's 500 Index retreated from its highest since February 2001.

Fed policy makers have increased interest rates from 1 percent in June 2004 to 4.75 percent.

Wal-Mart Stores Inc. fell before releasing sales figures for April. Aetna Inc. and Cigna Corp. declined after JPMorgan Chase & Co. cut its rating on the insurers, citing earnings concern.

Kodak Earnings

Tyco International, the world's biggest maker of fire and security systems, rose 10 cents to $27.06 in Germany. Profit from continuing operations in the second quarter increased to $1.08 billion, or 52 cents a share, from $399 million, or 19 cents, a year earlier.

Kodak, among 20 companies in the S&P 500 due to report quarterly results today, gained 26 cents to $27.61 in Germany. The world's largest photography company may say first-quarter profit increased to 5 cents a share, up from 3 cents a share a year ago, a Thomson survey showed.

Whole Foods Market, the No. 1 U.S. natural-foods grocer, rose $2.08 to $64.23 in Germany. Profit climbed to $51.8 million, or 36 cents a share, from $40.7 million, or 30 cents, a year earlier. Lehman Brothers Inc. analyst Meredith Adler estimated profit of 35 cents a share in the quarter, matching the average estimate of 17 analysts surveyed by Thomson Financial.

Priceline.com Inc. added 35 cents to $26.65 in Germany. The seller of discounted travel over the Internet said profit excluding stock-option and amortization expenses this quarter may be 48 cents to 53 cents a share, more than the 47 cent average estimate of 11 analysts in a Thomson Financial survey.

Tyco, Aon

Goodyear Tire & Rubber Co., the biggest tire maker in North America, will report before the market opens. Goodyear slipped 3 cents to $14.24 in Germany.

Aon Corp., the world's second-biggest insurance broker, and McKesson Corp., the largest U.S. drug wholesaler, are among those reporting after the close. The shares didn't trade in Europe.

Wal-Mart slipped 7 cents to $46.62 in Germany. The world's largest retailer and other merchants are scheduled to release April sales results. Retailers reported the slowest sales growth in more than a year in March as cold weather and higher gasoline prices crimped spending.

Transocean Inc. added 14 cents to $85.04 in Germany. The world's largest offshore oil and natural-gas driller is expected to report first-quarter profit of 48 cents a share, up from 24 cents a year earlier, according to a Thomson survey.

Productivity Report

A government report on productivity may provide clues about whether the Federal Reserve will have to keep raising interest rates to curb inflation.

Productivity, a measure of how much an employee produces for every hour worked, probably rose at an annual rate of 3 percent, following a 0.5 percent decline in the previous three months. Labor costs may have increased at a 1.2 percent pace after a 3.3 percent rise, according to the median estimate of economists.

A separate Labor Department report may indicate that first- time unemployment claims dropped to 310,000 last week, from 315,000 the week before. The data may shed light on the strength of the labor market a day before the release of the April payrolls data. Both reports are scheduled for release at 8:30 a.m. in Washington.

Aetna dropped 44 cents to $36.78 in Germany. Cigna fell 37 cents to $89.62. Analysts at JPMorgan cut their rating on the shares of the third and fourth-largest U.S. health insurers to ``neutral'' from ``overweight,'' citing first-quarter results and concerns of potential aggressive pricing policies.

Eye Infection

Bausch & Lomb Inc. fell 55 cents to $43.42 in Germany. The New York-based lens maker said some cases of fusarium keratitis, an eye infection that can lead to blindness, have been confirmed among European users of its ReNu line of contact-lens cleaners, the Wall Street Journal reported.

General Motors Corp., the world's largest auto-maker, and Delphi Corp., a bankrupt auto-parts maker, may be active.

The United Auto Workers union asked workers at Delphi to hold strike authorization votes by May 14, a union spokesman said. A strike may force General Motors, Delphi's largest customer and former corporate parent, to shut down within 48 hours, according to Sean McAlinden, an analyst with the Center for Automotive Research in Ann Arbor, Michigan..

GM added 6 cents to $22.53 and Delphi slipped 5 cents to 91 cents in Germany.

JDS Uniphase Corp. slid 20 cents to $3.40 in Germany. The communications equipment maker said this quarter's revenue will be $302 million to $322 million, compared with the $316.5 million average estimate of 11 analysts surveyed by Thomson Financial.

The S&P 500 lost 0.4 percent to 1307.85 yesterday. The Dow Jones Industrial Average slipped 0.1 percent to 11,400.28. The gauge yesterday reached the highest since January 2000. The Nasdaq Composite Index fell 0.3 percent to 2303.97.