Stocks rose on Friday after positive economic data from Europe and ahead of a U.S. report on existing home sales and a speech by Federal Reserve Chairman Ben Bernanke on the lessons from the financial crisis.
Purchasing managers indexes showed the German and French private sectors probably returned to growth in August, a week after data indicated the European heavy-weights pulled out of recession in the second quarter.
(The European reports) are really driving the market. They both came in better than expected, and they both came in indicating expansion, which is leading investors to believe that the recession may be over, said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
At a time when investors are searching for signs that the nascent U.S. housing recovery is gathering momentum, a National Association of Realtors survey is expected to show sales of existing homes likely rose to their highest level in 10 months in July, according to a Reuters poll.
Economists surveyed by Reuters predicted sales of previously-owned homes climbed to a seasonally adjusted annual rate of 5 million in July from 4.89 million units in June.
Bernanke is scheduled to speak to a gathering in Jackson Hole, Wyoming, on the lessons learned from the financial crisis and efforts to aid the economic recovery. Investors will scour his speech for clues into the Fed's thinking on the economy.
Both Bernanke's speech and the housing data are due at 10 a.m.
S&P 500 futures rose 5.70 points, and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 48 points, and Nasdaq 100 futures were up 5.25 points.
In news that hit shares in Japanese automakers overnight, the popular U.S. government cash-for-clunkers program, offering rebates of up to $4,500 to car buyers trading in older, fuel-thirsty vehicles, will end on Monday, the Transportation Department said.
In a potential lucrative joint truck venture, Caterpillar Inc
(Editing by Padraic Cassidy)