MW: U.S. stock futures climb as voters head to the polls
By Steve Goldstein, MarketWatch
LONDON (MarketWatch) - U.S. stock futures pointed higher Tuesday as voters headed to the polls to choose a new president and as some analysts say much of the bad news around the economy and corporate profits are already priced into stocks.
S&P 500 futures rose 24.5 points to 994.00 and Nasdaq 100 futures climbed 34.75 points to 1,376.20. Dow industrial futures rose 226 points.
U.S. stocks ended Monday's session in a muted tone, with the Dow Jones Industrial Average falling 5 points, the S&P 500 losing 2 points and the Nasdaq Composite adding 5 points. Dismal U.S. auto sales and a report showing the worst factory orders in 26 years did little to move the dial.
Tuesday's focus will turn to politics as Americans choose which Senator they'd like to run the White House for the next four years, Barack Obama or John McCain. The Senate contest also will be in the spotlight as a third of the upper chamber's seats are up for grabs.
"For now, the Senate race seems almost as interesting as the presidential one, though we add the caveat that policy intentions aside, the economic reality that will greet either presidential candidate, or any Senate make-up, will be as important a driver of policy as the campaign pledges of either McCain or Obama," said Rob Carnell, an economist at ING in London.
"Under either presidential candidate and under any Senate outcome, U.S. deficits are going to rise, growth is going to be very weak, and inflation likely to come close to zero, or even turn negative."
Overseas, the Nikkei 225 surged 6.3% in Tokyo after a three-day break, while the FTSE 100 added 2.6% in London for its sixth rise in succession.
European strategists at Morgan Stanley issued a "full house buy signal."
"The latest elements that pushed us there have been a capitulation among retail investors, purchasing managers and sell-side analysts, as measured by record mutual fund outflows, ISM new orders below 40 and analysts' revisions collapsing. The idea is that when these three groups know about the bad news, equity prices are probably already reflecting it," the strategists said
Factory orders for September highlights Tuesday's thin data release schedule. Overseas, Australia's central bank cut rates by three-quarters of a percentage point.
The dollar rose vs. the Japanese yen but dropped sharply against the euro. Oil futures, after a big drop on Monday, rose 88 cents to $64.79 a barrel.
Financials will be in the spotlight as The Wall Street Journal reported that the Treasury Department may use more of its $700 billion rescue fund to buy stakes in bond insurers and specialty finance firms, such as General Electric's GE Capital unit and CIT Group.
Mohawk Industries fell 22% in pre-open trade after reporting a $1.39 billion quarterly loss.
Archer Daniels Midland rose 11% in pre-open trade as its earnings blasted by analyst expectations.
MasterCard added 9% as its profit, adjusted for a legal settlement, also beat expectations.
