U.S. stock futures rose, indicating the Standard & Poor’s 500 Index may trim its first weekly drop in a month, on better-than-estimated earnings at Wells Fargo & Co. and speculation banks will pass government stress tests. Wells Fargo, the second-largest U.S. lender, jumped 23 percent. Bank of America Corp. and Citigroup Inc. gained as the New York Times reported all 19 banks examined to determine their viability if the recession deepens will pass the review. General Motors Corp., the biggest U.S. automaker, climbed 7.3 percent after saying it expects to double annual sales in China. Futures also advanced as initial jobless claims fell more than economists estimated and the trade deficit unexpectedly shrank. Futures on the S&P 500 expiring in June added 2.1 percent to 840 at 8:43 a.m. in New York. Dow Jones Industrial Average futures rose 1.7 percent to 7,923 and Nasdaq-100 Index futures increased 1.5 percent to 1,317.75. Stocks in Europe and Asia gained. “We’ve had nothing but good news on the financial industry,” said Jacques Porta, a fund manager at Ofi Patrimoine in Paris, which oversees about $615 million. “If the speculation on the stress tests turns out to be true, we certainly will have another rally.” The S&P 500 has climbed 22 percent since reaching the lowest level in a dozen years on March 9 as banks from Citigroup to JPMorgan Chase & Co. said they made money in the first two months of the year and Treasury Secretary Timothy Geithner unveiled plans to rid financial firms of toxic assets. The index is still down 8.7 percent in 2009 after tumbling 38 percent last year, its worst annual return since the Great Depression. ‘Corrections’ The measure will likely fall to about 780 from last week’s 842.50 close, said JPMorgan’s New York-based strategist Thomas Lee, who cited historical market “corrections” since 1900. U.S. stocks gained yesterday, snapping a two-day losing streak, as life insurers jumped on prospects of a government bailout and Pulte Homes Inc. agreed to buy Centex Corp. to create the nation’s largest homebuilder. Europe’s Dow Jones Stoxx 600 Index increased 1.1 percent as the Bank of England left its key interest rate at a record low of 0.5 percent. The MSCI Asia Pacific Index rallied 3.1 percent. Stress Test Wells Fargo jumped $3.36 to $18.25. First-quarter net income was about $3 billion as results at Wachovia Corp., acquired about three months ago, were exceeding expectations. The profit, of about 55 cents a share, compares with net income of $2 billion, or 60 cents, a year earlier, the San Francisco- based lender said today in a statement distributed by Business Wire. Bank of America gained 2.8 percent to $7.26 and Citigroup climbed 3.7 percent to $2.80. JPMorgan Chase & Co. added 1.3 percent to $27.80. Some of the largest lenders may still need additional capital infusions from investors or taxpayers, the New York Times said, citing unidentified officials involved in the research. Regulators may use the findings of the examinations, likely to be completed this month, to push some companies to sell distressed assets, according to the report. Federal Reserve officials are conducting an internal review of bank supervision aimed at improving regulators’ response to stress in the financial system, according to people familiar with the process. The evaluation focuses on speeding information flows and clearing up lines of communication for bank examiners who now report to both regional Fed bank officers and the Board of Governors in Washington. GM Jumps GM rose 7.3 percent to $2.07. The biggest foreign automaker in China said it expects to double annual sales in the country to over 2 million vehicles over the next five years. China’s passenger car sales rose 10 percent in March from a year earlier after tax cuts and government subsidies boosted demand, according to the China Association of Automobile Manufacturers. Robert Doll, global chief investment officer at BlackRock Inc., told financial news network CNBC he is advising investors to shift money from safer assets such as U.S. Treasuries into equities. “The worst of the recession is in the rear-view mirror,” Doll said on CNBC. He recommended that investors buy energy companies to benefit from a cyclical recovery, technology companies for growth and health-care companies for a defensive investment. Profits at S&P 500 companies probably fell 38 percent on average in the first quarter, according to analysts’ estimates compiled by Bloomberg. The stretch of seven straight declines in quarterly earnings is the longest since at least the Great Depression, data compiled by S&P and Bloomberg show. Exxon added 0.4 percent to $69.23, while ConocoPhillips increased 0.6 percent to $39.75. Crude oil rose for a second day after a government report showed a smaller gain in U.S. inventories than the industry indicated a day earlier. Treasuries declined for the first time in three days as global stocks advanced and the U.S. prepared to sell $18 billion of 10-year securities. The yield on the 10-year note rose as much as three basis points and was two basis points higher at 2.87 percent as of 6:42 a.m.

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