By Ellis Mnyandu
Stock futures signaled Wall Street will edge higher on Friday, with a further rebound in shares of natural resources companies likely to offset bleak corporate outlooks and fears of inflation.
U.S. front-month crude held above $50 a barrel a day after surging 7 percent in the wake of the Federal Reserve's plan to pump another $1 trillion into the recession-hit economy. Spot gold prices hit a three-week high earlier and copper prices have surged as the U.S. central bank's plan fanned concerns of U.S. dollar weakness and inflation.
Commodity stocks rising before the bell included miner Freeport McMoRan Copper & Gold Inc
Everybody is going to be watching gold and other commodities, with oil back above $50 and gold starting to approach that $1,000/oz level again, said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
Yesterday's activity in commodity stocks and commodity markets was quite significant in my view in terms of how the market is perceiving what the Fed did (on Wednesday) and its potential impact down the road. The assessment is that this is potentially going to be bad for the dollar.
S&P 500 futures were up 1.90 points and 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 climbed 8 points, and Nasdaq 100 futures added 3 points.
Trading was likely to be volatile amid options expirations.
In addition to the fears of inflation from the Fed's plan, there is concern that the ruckus over insurer American International Group's
A separate measure by the Federal Reserve, a long-awaited program to resuscitate consumer and small business lending, got off to a stuttering start on Thursday as the AIG political fury persisted.
Federal Reserve Chairman Ben Bernanke is scheduled to speak on the financial crisis and community banking at a banking event in Phoenix, Arizona, at 12 p.m. EDT.
Companies with disappointing outlooks included Xerox Corp
U.S. stocks fell on Thursday on concerns that the Federal Reserve's latest efforts to stem the U.S. recession are too costly and untested, prompting investors to book profits on bank shares after the recent sharp rally.
(Reporting by Ellis Mnyandu, Editing by Chizu Nomiyama)