U.S. Stock-Index Futures Gain as Lawmakers Resume Budget Talks
Traders Magazine Online News, December 27, 2012
U.S. stock futures advanced, indicating the Standard & Poor's 500 Index may gain for the first time in four days, as lawmakers return to Washington to resume budget talks and data showed jobless claims decreased.
Microsoft Corp. climbed 0.3 percent after the company said it will open more retail stores next year. BCD Semiconductor Manufacturing Ltd. almost doubled after Diodes Inc. agreed to buy the company for $151 million.
S&P 500 index futures expiring in March advanced 0.2 percent to 1,416.3 at 8:34 a.m. in New York. The equity benchmark slipped 0.5 percent yesterday as talks between President Barack Obama and Congressional lawmakers dragged on beyond the Christmas holiday. The gauge has still rallied 13 percent this year, its largest annual gain since 2009. Dow Jones Industrial Average futures rose 16 points, or 0.1 percent, to 13,064 today.
"Markets may have been disappointed by the lack of decisive action on the fiscal cliff, but at least President Barack Obama's flight back to Washington is a positive sign," said Pierre Mouton, who helps oversee $6 billion as portfolio manager at Notz Stucki & Cie. in Geneva. "Most investors will wait until early January to decide whether to take on risk or not."
Obama is pushing U.S. lawmakers to agree on an interim deal to avert more than $600 billion of automatic tax increases and spending cuts, known as the fiscal cliff, that will otherwise come into effect next month. Republican House leaders will hold a conference with party members today to discuss the next steps in budget negotiations, according to an aide who asked for anonymity to discuss the issue.
Treasury Secretary Timothy Geithner wrote in a letter to Congress yesterday that the federal debt limit will be reached on Dec. 31 and his department will begin using "extraordinary measures" to finance $200 billion in deficits in early 2013.
Stocks extended gains as data showed fewer Americans than forecast filed claims for unemployment insurance last week as state offices rushed to tally the data in a holiday-shortened period. Applications for jobless benefits decreased 12,000 to 350,000 in the week ended Dec. 22, Labor Department figures showed today. Economists forecast 360,000, according to the median estimate in a Bloomberg survey.
Sales of new houses climbed to a 380,000 annual rate in November, the most in more than two years, economists projected before a Commerce Department report due at 10 a.m. New York time.
The Conference Board will release its consumer sentiment data for December at the same time. The confidence index dropped to 70 this month from 73.7 in November, according o the median forecast of economists in a Bloomberg News survey.
Microsoft gained 0.3 percent to $26.93 after the world's biggest software maker said in its official blog that it will open more retail stores in 2013, including locations in San Francisco and Miami.
BCD's American Depositary Shares surged 96 percent to $7.80 after Diodes said yesterday it will buy the company in an all- cash transaction valued at $151 million. Each of BCD's ADS, representing six ordinary shares, will be converted to the right to receive $8.
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