RTTNews - U.S. stocks are set for a higher opening Tuesday morning looking to extend the gains in the previous session as earnings season gathers momentum, with results from bellwether companies such as Goldman Sachs (GS), Intel (INTC), Altera (ALTR), Johnson & Johnson (JNJ) and Yum Brands (YUM) expected during the week. The Commerce Department's retail sales data for June is likely to move the market, given the implication consumer spending has for the sustainability of the much-awaited recovery.
As of 6.45 am ET, the Dow Futures were up 18 points, the S&P Futures were up 1.50 points, and the Nasdaq 100 futures were up 2.50 points.
Monday, positive comments on the performance of financial sector by analysts Meredith Whitney, who raised the rating for Goldman Sachs from Neutral to Buy and also saw value for investors in Bank of America, helped stocks stage a smart rally led by financial stocks.
The Dow closed up by 185.16 points or 2.3% at 8,332, the Nasdaq moved up by 37.18 points or 2.1% to 1,793 and the S&P 500 rose by 21.92 points or 2.5% to 901.
All eyes will be on the results from Goldman Sachs, which will be reporting results for the second quarter before the market opens for trading. Goldman Sachs (GS) is scheduled to report its second quarter results before the markets open. Analysts expect the company to report earnings of $3.48 per share for the quarter.
On the macroeconomic front, the retail sales report is due to be released at 8:30 am. Analysts expect the numbers to have benefited from the stimulus-induced spending and also the rising gasoline prices. At about the same time, the Labor Department is set to release its report on producer prices for June. Inflationary pressures, which have been on the wane ever since the credit crisis set in, should remain benign in the near to medium term. Economists estimate a 1% rise in the headline index and a more modest 0.1% rise in core producer prices that exclude food and energy.
The Commerce Department is also scheduled to release the business inventories report for May, with economists estimating a 0.8% decline in business inventories. The wholesale inventories report released last week showed a 0.8% drop, declining for the ninth straight month, reflecting the inventory depletion that is happening in response to the slow down.
The U.S. Department of the Treasury revealed that head of Auto Task Force, Steve Rattner, who played a key role in the restructuring of automakers General Motors Co. (GMGMQ.PK) and Chrysler LLC, has decided to step down from the post. An adviser to the Auto Task Force, Ron Bloom is set to take over the responsibilities.
Treasury Secretary Timothy Geithner, as part of his overseas tour to the Middle East, in a speech to the investors in Jeddah, Saudi Arabia earlier in the day assured that his Government would ensure that the greenback's value is preserved. He also expressed hope that the signs of confidence are returning to the financial sector in the U.S.
After the markets closed Monday, railroad operator CSX Corp. (CSX) reported earnings of $0.78 per share compared to $0.93 per share last year. Excluding the impact of discontinued operations, the company earned $0.72 per share.
Meanwhile, Novellus Systems (NVLS) reported an adjusted second-quarter loss of $39.3 million or $0.41 per share versus net income of $6.2 million or $0.06 per share in the year ago quarter. Wall Street analysts expected the company to report a loss of $0.38 per share for the quarter.
Video-game publisher Take-Two Interactive Software Inc. (TTWO) lowered its outlook for fiscal year 2009, citing several factors including a delay in the launch of BioShock 2. The company also reduced its outlook for the third and fourth quarter, reflecting reduced sales of catalog products, and lower than anticipated orders of new releases amid a challenging retail environment.
Light sweet crude oil for August delivery is gaining $0.85 and trading above the $60-mark at $60.54 amid hopes of a recovery in demand. Reflecting an improvement in the risk appetite in the market, the dollar is weakening against the Pound, while it is strengthening against the Japanese Yen and the Euro..
The European markets are trading in the positive territory, led by mining stocks following a rebound in commodity prices in the international market. Financial stocks also advanced following gains on Wall Street. The CAC-40 Index in France is gaining 0.55%, the DAX Index in Germany is rising 0.80% and the FTSE Index in the U.K is up 0.63%.
On the economic front, the Royal Institution of Chartered Surveyors or RICS said that house prices in England and Wales dropped in June at their slowest annual pace in nearly two years in June. The house price balance rose to minus 18.1 in the three months to June from minus 43.8 in May, RICS noted. Separately, the Centre for European Economic Research or ZEW said its economic sentiment indicator for Germany dropped to 39.5 points in July from 44.8 points in June. Analysts expected the indicator to clock in showing a reading of 47.8. The Eurostat revealed that the Eurozone's industrial production recorded a monthly growth of 0.5% in May, reversing a revised 1.4% fall in April. The Monster Employment Index for Europe dipped 2% in June, results of a survey by the Monster Worldwide Inc. revealed earlier in the day.. Year-on-year, the index fell 39%.
The Asian markets ended the session sharply higher on expectations of a recovery following on the positive clues from Wall Street where the major indices ended in green led by financial stocks.
Among the economic news from the region, Singapore raised its economic forecast for 2009, expecting the economy to contract at a slower pace this year. The Ministry of Trade and Industry said that the gross domestic product or GDP is now expected to contract by between 4% and 6% this year compared to its earlier forecast of a 6% to 9% contraction.
Elsewhere in Australia, business confidence turned positive in June for the first time since December 2007, the results of the latest survey by the National Australia Bank revealed. The report said the business conditions appeared to have rebounded to a level roughly similar to that reported prior to the collapse of Lehman Brothers in September last year and the global meltdown in activity that ensued.
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