WSJ: US Stock Futures Continue Early Surge On Strong Tech Sector Earnings
By Polya Lesova
U.S. stock futures rallied on Wednesday, with strong earnings from the technology sector buoying sentiment, while gold and oil prices continued to climb.
Futures on the Dow Jones Industrial Average surged 143 points to 12369 and futures on the Standard & Poor's 500 stock index gained 19.1 points to 1327.70. Nasdaq 100 futures rose 31 points to 2342.
Commodity prices also posted strong gains. Crude oil for June delivery rose $1.21 to $109.49 a barrel in electronic trading on Globex.
Gold for June delivery advanced $9.60 to $1,504.70 an ounce.
In contrast, the dollar fell sharply against its major rivals. The euro rallied 1.3% to $1.4525, while the dollar index dropped 0.9% to 74.379.
The blue-chip Dow index closed up 0.5% on Tuesday, partially recovering from a slump in the previous session.
Steen Jakobsen, chief economist at Saxo Bank, said investors are cheered by talk that the U.S. Federal Reserve is likely to keep reinvesting maturing assets after it completes its $600 billion Treasury-buying program in June.
"Effectively, we would still be having quantitative easing and we would be entering de facto QE3 with the reinvestment," Jakobsen said.
The Fed has been pursuing a very loose monetary policy, known as quantitative easing, or QE, in an effort to boost the economic recovery.
The earnings reporting season continues Wednesday, with results expected from numerous companies, including AT&T Inc. (T) and Wells Fargo & Co. (WFC). United Technologies Corp. (UTX) raised its full-year profit forecast on what it called a "strong start" to 2011.
Generally, "earnings are in line [with expectations]," Jakobsen said. "The market perceives in line as good news."
On the economic front, data on existing-home sales will be released after the U.S. stock market opens.
European markets rose sharply, led higher by the technology sector following strong results from chip giant Intel Corp. (INTC) and Internet group Yahoo Inc. (YHOO). In premarket trade, shares of Intel rose 6.3% and those of Yahoo gained 5%.
Also in premarket trade, U.S.-listed shares of ASML Holding NV (ASML, ASML.AE), which makes lithography systems for the semiconductor industry, rallied 9.3% and those of STMicroelectronics NV (STM, STM.MI) rose 7%.
Meanwhile, iPad and iPhone maker Apple Inc. (AAPL) will report quarterly results after the market closes Wednesday. Apple's shares were up nearly 2% in premarket trading.
On the downside, shares of International Business Machines Corp. (IBM) slipped 1.2% in premarket trade. The tech giant late Monday reported a 10% rise in quarterly profit.
In deal news, power company AES Corp. (AES) has agreed to acquire utility DPL Inc. (DPL) for $3.5 billion in cash, or $30 a share. That represents an 8.7% premium over DPL's closing share price on April 19. The deal has an enterprise value of $4.7 billion.
