U.S. stock-index futures advanced, indicating the Standard & Poor’s 500 Index will rise for a second day, amid signs the nation’s lawmakers may agree on a compromise deal to avoid a debt default.
S&P 500 futures expiring in December rallied 0.9% to 1,662.9 at 7:01 a.m. in New York. The benchmark gauge for U.S. equities has still retreated 2% this week 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 101 points, or 0.7%, to 14,829 today.
“After such a negative start to the week, the market welcomes the news of a potential deal,” said Andreas Nigg, head of equity and commodity strategy at Vontobel Asset Management in Zurich. “I would expect a relief rally if a satisfactory solution is presented. We all expect that cooler heads will prevail, but we also know that the risk for serious damage, while very small, cannot be ignored.”
Its been 10 day since the start of the partial shutdown hit government. House Republican and Senate Democratic leaders are open to a short-term increase in the $16.7 trillion debt limit, congressional aides of both parties said yesterday.
According to Bloomberg a Labor Department report at 8:30 a.m. EDT may show that initial jobless claims increased to 311,000 last week, from 308,000 the previous week.
In corporate world, Citrix Systems Inc. shares could come under pressure after the enterprise software services provider warned of a shortfall late Wednesday for its upcoming third-quarter results.
Micron Technology is due to report fourth-quarter earnings of 24 cents a share, according to a consensus survey by Thomson Reuters.
The stock’s strong buy rating was supported on Monday by Raymond James. “We believe Micron shares will continue to perform well as structural pricing dynamics continue to improve,” Hans Mosesmann, an analyst at Raymond James, said in a note.
Safeway is forecast to report earnings of 16 cents a share in the third quarter. Ajay Jain at Cantor Fitzgerald on Wednesday reiterated his sell rating on Safeway’s stock. “While we believe the prospect of further asset sales is one of several factors underpinning the on-going short squeeze in Safeway shares, we’re not sure what steps management can take that are ultimately value accretive relative to the current share price,” he said in a report.