BLBG: U.S. Stock Futures Rise After State of the Union Speech
U.S. stock futures rose, indicating the Standard & Poor’s 500 Index will extend a five-year high, as President Barack Obama proposed spending on infrastructure and environmental projects in his State of the Union address.
General Electric Co. climbed 3 percent after agreeing to sell its remaining stake in NBC Universal to Comcast Corp. for $16.7 billion. Comcast, the largest U.S. cable company, jumped 7.8 percent. Western Union Co. slid 2.4 percent after forecasting continued revenue declines in 2013.
S&P 500 futures expiring in March added 0.2 percent to 1,519 at 9:04 a.m. in New York. Dow Jones Industrial Average futures climbed 12 points, or 0.1 percent, to 13,985. Both measures closed at the highest level since 2007 yesterday.
“I think the bias has been consistently green on the screen,” Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which oversees $55 billion, said in a telephone interview. “We didn’t hear anything shockingly different from Obama’s speech that would have pulled investors’ enthusiasm for stocks out of the marketplace.”
The S&P 500 has rallied 6.5 percent in 2013 as U.S. lawmakers reached a budget compromise. It has more than doubled since bottoming in March 2009 as the Federal Reserve conducted three rounds of bond-buying to lower interest rates and boost economic growth. The index has risen to within 3 percent of its record of 1,565.15 reached in October 2007.
Minimum Wage
Obama called for raising the federal minimum wage to $9 an hour and pledged to expand trade with Europe in the State of the Union speech late yesterday. He also proposed spending $50 billion on “urgent” infrastructure projects. He lauded steps by companies such as Apple Inc., Caterpillar Inc. and Ford Motor Co. to bring manufacturing jobs back to the U.S.
He said he stood by an offer he had previously made to cut spending on the Medicare health insurance plan for the elderly by cutting payments to drug companies, raising premiums for the wealthy and changing medical reimbursement procedures.
He repeated his demand that Republicans accept raising tax revenue along with spending cuts as part of any “balanced” approach to his goal of $1.5 trillion in additional deficit reduction over a decade. He said the balance could be achieved by “getting rid of tax loopholes and deductions for the well- off and well-connected.”
Retail sales in the U.S. rose in January for a third consecutive month as labor market progress helped Americans overcome an increase in the payroll tax. The 0.1 percent climb followed an unrevised 0.5 percent increase in December, Commerce Department figures showed today in Washington. The advance matched the median forecast of 80 economists surveyed by Bloomberg.
GE, Comcast
GE rallied 3 percent to $23.26 and Comcast advanced 7.8 percent to $42. The cable company will buy GE’s 49 percent stake in NBC Universal, following through on its purchase of a controlling stake two years ago.
The sale will result in a pretax gain of about $1 billion for GE and it will use proceeds to help increase repurchases of its shares by $10 billion a year, the Fairfield, Connecticut- based company said.
Comcast also released its fourth-quarter results, saying net income rose 18 percent to $1.52 billion, or 56 cents a share, from $1.29 billion, or 47 cents, a year earlier. Sales climbed almost 6 percent to $15.9 billion.
Western Union fell 2.4 percent to $13.99 as the world’s biggest money-transfer business said it expects “low single digit” revenue declines in 2013. Fourth-quarter net income plunged 47 percent to $237.9 million, or 40 cents a share. The average estimate of 28 analysts surveyed by Bloomberg was for profit of 35 cents.
Cliffs Natural Resources Inc. lost 13 percent to $31.90. The biggest U.S. iron-ore producer cut its quarterly dividend by 76 percent after the price of the commodity declined and a Canadian mining project was delayed.
To contact the reporters on this story: Adria Cimino in Paris at acimino1@bloomberg.net; Leslie Picker in New York at lpicker2@bloomberg.net
To contact the editors responsible for this story: Andrew Rummer at arummer@bloomberg.net; Lynn Thomasson at lthomasson@bloomberg.net
