BLBG: U.S. Stock Futures Rise on ECB Rate Cut, Jobless Claims
U.S. stock futures rose, indicating the Standard & Poor’s 500 Index will rebound from the biggest drop in two weeks, as the European Central Bank cut its key interest rate and American jobless claims unexpectedly fell.
Facebook Inc. (FB) added 1.7 percent as the operator of the world’s largest social network reported sales that topped projections. General Motors Co. rose 3.7 percent as it narrowed its first-quarter loss in Europe. MetLife Inc. and Prudential Financial Inc. climbed more than 2.2 percent after the insurers’ earnings beat forecasts.
S&P 500 futures expiring in June advanced 0.6 percent to 1,586.8 at 8:37 a.m. in New York. The equity gauge lost 0.9 percent yesterday as U.S. payrolls and manufacturing grew less than forecast, trimming this year’s rally to 11 percent. Contracts on the Dow Jones Industrial Average added 79 points, or 0.5 percent, to 14,715 today.
“Europe should emulate the U.S. and even go beyond it, and that is have a much easier monetary policy,” Stanley Nabi, vice chairman of Silvercrest Asset Management Group in New York, said by telephone. He helps manage more than $11 billion. “I was not as pessimistic over the last few days as some on Wall Street have turned. Central banks are going to continue to be supportive. They will continue watching the economy.”
ECB policy makers meeting in Bratislava today lowered the main refinancing rate to 0.5 percent from 0.75 percent, a move predicted by 45 of 70 economists in a Bloomberg News survey. The ECB kept the deposit rate at zero and reduced the marginal lending rate to 1 percent from 1.5 percent to preserve a symmetrical rate corridor.
Fed Stimulus
The Federal Reserve said yesterday it will keep buying bonds at a monthly pace of $85 billion while standing ready to raise or lower purchases as the economy changes.
The number of Americans filing claims for jobless benefits unexpectedly dropped to the lowest level in more than five years. Applications for unemployment insurance payments fell 18,000 to 324,000 in the week ended April 27, the fewest since January 2008, Labor Department figures showed. Economists forecast 345,000 claims, according to the median estimate in a Bloomberg survey.
A report tomorrow is projected to show U.S. unemployment stayed at 7.6 percent in April, while payrolls rose 145,000, compared with an increase of 88,000 the prior month, according to the median estimates of economists in a Bloomberg survey.
A separate report today showed the productivity of U.S. workers rose in the first quarter as companies focused on containing labor expenses.
Earnings Season
Investors also watched earnings reports today. Of the 378 companies in the S&P 500 (SPX) that have reported results so far, 73 percent exceeded analysts’ earnings predictions while 54 percent missed on sales, data compiled by Bloomberg show. Profit at S&P 500 companies rose 1.1 percent in the first three months of the year, according to estimates compiled by Bloomberg.
Facebook advanced 1.7 percent to $27.90. First-quarter sales surged 38 percent to $1.46 billion, a sign that Chief Executive Officer Mark Zuckerberg is making headway in a drive to make more money from mobile advertising. Profit excluding certain items was 12 cents a share, compared with an average analyst prediction of 13 cents.
General Motors gained 3.7 percent to $31.31. The automaker, after losing more than $18 billion in Europe since 1999, narrowed its first-quarter loss in the region, outpacing Ford Motor Co. and helping it beat analysts’ earnings estimates.
MetLife, Prudential
MetLife Inc. added 2.2 percent to $39.25. The largest U.S. life insurer reported a first-quarter profit compared with a year-earlier loss as Chief Executive Officer Steven Kandarian expands outside the U.S. Kandarian, 61, is searching for customers in faster-growing economies and reducing expenses as slow expansion in the company’s main markets weighs on results.
Prudential rose 2.9 percent to $61.02. The No. 2 U.S. life insurer also posted results that exceeded analysts’ estimates.
Yelp Inc. rallied 11 percent to $28.11 after the consumer- review website reported first-quarter revenue that topped estimates, helped by an expansion into new markets and a jump in local advertising.
To contact the reporters on this story: Inyoung Hwang in New York at ihwang7@bloomberg.net; Jonathan Morgan in Frankfurt at jmorgan157@bloomberg.net
To contact the editors responsible for this story: Andrew Rummer at arummer@bloomberg.net; Lynn Thomasson at lthomasson@bloomberg.net
