US stock-index futures surged amid Yellen nomination

U.S. stock-index futures advanced, suggesting the Standard & Poor’s 500 Index will rebound from the biggest two-day decline since June, as Janet Yellen was picked to lead the Federal Reserve and earning season started with Alcoa reporting better-than-estimated profit.

S&P 500 futures expiring in December climbed 0.4% to 1,656.5 at 11:39 a.m. in London. The benchmark gauge for U.S. equities has retreated 2.1% over the past two days as concern grew that lawmakers may fail to raise the federal debt ceiling in time to avoid a government default. Contracts on the Dow Jones Industrial Average increased 50 points, or 0.2%, to 14,747 today.

Some positivism seemed to be coming through for stock futures after a White House official said President Barack Obama will announce Yellen’s appointment at a 3 p.m. Eastern ceremony. However, investors were still moderate in taking large positions on the market.

In corporate news, earnings season unofficially kicked off Tuesday evening with Alcoa. The aluminum maker shifted to a profit diminishing costs, with results sailing past Wall Street forecasts and shares rising in late trade. The more interesting fact here is that, Alcoa, which acts as an early gauge of the health of global manufacturing, stood by an earlier forecast that global demand for aluminum will rise 7% this year.

Profits for companies in the S&P 500 probably increased 1.7% during the third quarter while sales rose 2.2%, according to analysts’ estimates compiled by Bloomberg. Analysts forecast earnings growth will accelerate to 8.9% in the final three months of the year.

Yum brands fell 6.5% to $66.66 in Germany as the owner of the KFC fast-food chain also cut its 2013 earnings forecast. Third-quarter net income decreased to $152 million, or 33 cents a share, from $471 million, or $1, a year earlier, the Louisville, Kentucky-based company said. Excluding certain items, profit was 85 cents a share.

Costco is projected to report fourth-quarter earnings of $1.46 a share, according to a consensus survey by Thomson Reuters.

Family Dollar Stores is forecast to post earnings of 84 cents a share in the fourth quarter.

Chevron is scheduled to release its mid-quarter update on its production and refining business for the third quarter.