SF: U.S. Stock-Index Futures Gain, Indicating Rebound Will Continue
May 26 (Bloomberg) -- U.S. stock-index futures advanced, indicating the Standard & Poor's 500 Index will continue to pare this month's slide, before reports that may point to a broadening of the U.S. recovery.
Vertex Pharmaceuticals Inc. surged 12 percent in Germany as a clinical trial showed its experimental hepatitis C drug made treatment more effective when added to a standard therapy. American International Group Inc. rose 1.5 percent in early New York trading as the insurer was said to be weighing the sale of its stake in a portfolio of about 17,000 apartments.
June contracts on the S&P 500 increased 0.9 percent to 1,082.50 as of 12:24 p.m. in London after earlier falling as much as 0.2 percent. U.S. stocks erased losses in the final minutes of trading yesterday, with the S&P 500 wiping out a 3.1 percent drop, as the gauge rebounded from its 2010 low. Dow Jones Industrial Average futures gained 0.8 percent to 10,102 and Nasdaq-100 Index futures also rose 0.8 percent to 1,830.75 today.
"The market is calming down," said Jacques Porta, a fund manager at Ofi Patrimoine in Paris, which oversees about $425 million in stocks. "It anticipates the return of economic growth in the U.S. as we see very little disappointing economic data coming from the region."
Debt Crisis
Concern the European debt crisis will spread, prompted by credit-rating downgrades of Greece, Spain and Portugal, has driven the MSCI World Index down 15 percent from this year's high. The S&P 500 has slumped 9.5 percent so far this month, on course for the biggest drop since February 2009.
Even so, two government reports today may show the U.S. economy is strengthening. Bookings for durable goods rose 1.3 percent in April, according to the median of 77 economist projections in a Bloomberg survey before Commerce Department data due at 8:30 a.m. in Washington. New home sales climbed to an annual rate of 425,000, the most since September 2008, a report scheduled to 10:00 a.m. may show.
The number of mortgage applications in the U.S. rose last week by the most in a month as homeowners took advantage of borrowing costs close to a record low to refinance.
The 11.3 percent increase in the Mortgage Bankers Association's applications index for the week ended May 21 followed a 1.5 percent drop the previous week, the Washington- based group said today. Refinancing surged 17 percent, the most since February. Purchase applications fell to the lowest level since 1997.
The U.S. economy will grow 3.2 percent in 2010 and next year instead of the 2.5 percent predicted in November, and the euro region will advance 1.2 percent compared with the previous forecast of 0.9 percent, the Organization for Economic Cooperation and Development said today in a report. Japan's economy will expand 3 percent instead of 1.8 percent.
Vertex, AIG
Vertex Pharmaceuticals jumped 12 percent to $38.06 in Germany. The hepatitis C virus was undetectable in 75 percent of patients given 12 weeks of Vertex's medicine, called telaprevir, along with a combination therapy normally used to treat the infection, the company said. About 69 percent of patients treated for 8 weeks with the telaprevir regimen were hepatitis- free after 48 weeks, compared with 44 percent of those given the standard therapy alone.
AIG rose 1.5 percent to $35 in early trading. AIG's real estate arm and Morgan Properties agreed in June 2007 to buy 86 apartment complexes, mostly in New Jersey and Pennsylvania, from Kushner Cos. for about $1.9 billion, including debt. Morgan may buy the majority of the bailed-out insurer's interest in the joint venture, said two people with knowledge of the discussions, who asked not to be identified because talks are private. The people said they didn't know what price New York- based AIG is seeking.
Crude Gains
ConocoPhillips, the third-largest U.S. energy company, gained 1.5 percent to $50.65 in early trading as crude oil rose more than 2 percent in New York. Barrick Gold Corp., the world's biggest gold producer, rose 2.5 percent to $43.20 as the precious metal rose for a third day in London.
Alcoa Inc. rallied 2.2 percent to $11.55 in early trading as the largest U.S. aluminum producer was raised to "outperform" from "neutral" at Macquarie Group Ltd.
Separately, aluminum, copper, lead, nickel, tin and zinc all gained on the London Metal Exchange today.
