U.S. Stock-Index Futures Advance, Signal Rebound for S&P 500
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By Sarah Jones
June 29 (Bloomberg) -- U.S. stock futures rose, indicating the Standard & Poor’s 500 Index may rebound following its first back-to-back weekly decline since March, as higher oil prices lifted energy producers.
Exxon Mobil Corp. and ConocoPhillips increased in Germany. J.C. Penney Co. gained 1.2 percent after Morgan Stanley raised its recommendation for the third-largest U.S. department-store chain to “overweight.” Biogen Idec Inc. declined 1.1 percent as Deutsche Bank AG downgraded the shares and the biotechnology company said another patient using its multiple sclerosis drug was diagnosed with a brain illness.
Futures on the S&P 500 expiring in September added 0.3 percent to 916.40 at 12:17 p.m. in London. Dow Jones Industrial Average futures climbed 0.3 percent to 8,394 and Nasdaq-100 Index futures gained 0.3 percent to 1,481.75. Stocks in Europe rose, while Asian shares dropped.
The S&P 500, whose gain in the past three months was the steepest in seven decades, is rallying in tandem with benchmark measures for raw materials, developing-country equities and hedge funds. The so-called correlation coefficient that measures how closely markets rise and fall together has reached the highest levels ever, according to data compiled by Bloomberg.
“It’s nice that have had a bit of a bounce in the market, but there is still a wall of worry that can be climbed,” said John Haynes, a U.S. equities strategist at Rensburg Sheppards Plc in London. “The consolidation we have seen is not unreasonable, but the next few quarters are going to be an interesting test for sentiment.”
Volatility Gauge
U.S. stocks declined last week as the highest American savings rate in 15 years spurred concern that consumer spending will slow and oil retreated. The S&P 500 has still rebounded 36 percent since reaching a 12-year low on March 9 amid speculation the deterioration in the global economy is slowing.
While the S&P 500 has fallen in the past two weeks, the benchmark gauge for measuring the cost of using options as insurance against declines in stocks has slid to the lowest level since the last session before Lehman Brothers Holdings Inc. filed for the biggest bankruptcy in U.S. history.
The VIX, as the Chicago Board Options Exchange Volatility Index is known, has dropped to 25.93 from a record 80.86 in November. That’s still above the 20.18 average over its 19-year history.
Exxon, the largest U.S. oil producer, added 0.4 percent to $69.34, while ConocoPhillips rose 0.8 percent to $41.96. Crude gained as much as 0.7 percent to $69.67 a barrel in New York, recouping an earlier 1.2 percent loss.
J.C. Penney, Biogen
J.C. Penney climbed 1.2 percent to $28.72 in early New York trading. Morgan Stanley upgraded the shares to “overweight” from “equal-weight,” saying the retailer is the “most likely candidate in the department store group to outperform current consensus gross margin expectations in the second half of 2009 and beyond.” The shares didn’t trade in Europe.
Biogen fell 1.1 percent to $49.53 in Germany after Deutsche Bank downgraded the shares to “hold” from “buy,” saying they were now “fairly valued.”
Separately, Biogen said a case of progressive multifocal leukoencephalopathy was confirmed in a Tysabri patient on June 23. It was the 10th case confirmed since the treatment was reintroduced in July 2006.
To contact the reporters on this story: Sarah Jones in London at [email protected]. Last Updated: June 29, 2009 07:20 EDT
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