U.S. Stock-Index Futures Rise; American Express, Wal-Mart Gain
April 25
U.S. stock futures gained after American Express Co. posted better-than-estimated profit, UBS AG analysts said the worst is over for bank writedowns and Merrill Lynch & Co. advised buying Wal-Mart Stores Inc. shares.
American Express, the biggest U.S. credit-card lender, rallied on a 30 percent gain in overseas earnings. Wells Fargo & Co. and Citigroup Inc. climbed after UBS boosted its recommendation on U.S. banks. Wal-Mart, the biggest retailer, advanced as Merrill analysts raised their earnings estimates. Ericsson AB and Samsung Electronics Co. spurred gains in European and Asian shares on earnings that beat projections.
Standard & Poor's 500 Index futures expiring in June added 8.1, or 0.6 percent, to 1,394.1 at 8:23 a.m. in New York. Dow Jones Industrial Average futures rose 63 to 12,894. Nasdaq-100 Index futures gained 10.5 to 1,931.25. Europe's Dow Jones Stoxx 600 Index added 1.6 percent, while the MSCI Asia Pacific Index increased 0.8 percent.
``Earnings came in rather better than expected,'' Tilmann Galler, who helps oversee about $25 billion as client portfolio manager at JPMorgan Asset Management in Frankfurt, said in a Bloomberg Television interview today.
The S&P 500 has gained 5 percent since the end of the first quarter as earnings topped analysts' estimates at more than 68 percent of the 233 companies in the index that have released results so far, according to data compiled by Bloomberg. The benchmark for U.S. equities is poised to climb for a third straight day, extending its 9.1 percent rebound from a 19-month low on March 10.
U.S. stocks gained yesterday on renewed speculation the worst is over for financial and consumer shares after Merrill Lynch & Co. assuaged concern about its finances, the dollar rallied and oil prices fell.
American Express
American Express jumped $1.38 to $46.56. The credit-card lender said profit from continuing operations declined 11 percent to $974 million, or 84 cents a share. That's 4 cents better than the average estimate of 17 analysts surveyed by Bloomberg.
UBS raised its recommendation on U.S. bank shares to ``neutral'' from ``underweight,'' saying banks will reveal most of their remaining ``mark-to-market'' writedowns on credit- related securities during their first-quarter results.
Wells Fargo, the biggest bank on the U.S. West Coast, gained 14 cents to $29.99. Citigroup, the country's largest lender by assets, added 42 cents to $26.18. Bank of America Corp., the second-biggst bank by assets, increased 13 cents to $38.
Wal-Mart Gains
Wal-Mart rose 51 cents to $57.96. Merrill analyst Virginia Genereux upgraded the stock to ``buy'' from ``neutral,'' citing the company's recent first-quarter earnings forecast and the potential that customers will spend tax rebates at its stores.
Merrill Lynch rose 37 cents to $48.46. The third-biggest U.S. securities firm by market value is in talks with TPG Inc. about developing closer ties, including a possible capital investment if the bank needs it, the Financial Times reported, citing people familiar with the talks.
TPG wants to be the first to be asked if Merrill needs more capital, the newspaper said. Merrill declined to comment, according to the Financial Times.
Juniper Networks Inc. gained 97 cents to $26.70. The maker of networking equipment said first-quarter profit climbed 66 percent to $110.4 million, or 20 cents a share, beating the average estimate of analysts surveyed by Bloomberg.
Microsoft Corp., whose Windows software dominates the personal-computer market, sank $1.41 to $30.39 after sales slumped, casting doubt on whether PC demand can hold up in a slowing economy. The world's largest software maker reported a 24 percent drop in sales of Windows last quarter and forecast earnings that may miss analysts' estimates, breaking a streak of positive reports from Intel Corp. and Google Inc.
Confidence among U.S. consumers probably fell this month to its lowest level in a quarter century as gasoline prices rose to a record and unemployment climbed, economists said before the Reuters/University of Michigan report to be released at 10 a.m. New York time today.
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