BLBG: U.S. Index Futures Signal Equities to Rebound After Monthly Drop
Investors to assess manufacturing data for health of recovery
Marathon Oil slides on share-sale plan to boost finances
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U.S. stock-index futures rose, indicating equities will rebound after capping their third consecutive month of losses, amid investor optimism about central bank support.
Standard & Poor’s 500 Index contracts expiring in March rose 0.9 percent to 1,947.25 at 6:36 a.m. in New York. Equities erased a monthly gain yesterday, as banks and health-cares stocks put the brakes on a two-week rebound. While the index is still 5.6 percent above a Feb. 11 low, it’s 9.3 percent off an all-time high reached last May. A measure of volatility has jumped 13 percent this year. Dow Jones Industrial Average futures rose 140 points, or 0.9 percent, to 16,637, today.
“We’re in a rebound mode for equity markets,” said Christoph Riniker, the Zurich-based head of strategy research at Julius Baer Group Ltd. “China and upcoming central-bank meetings are in focus and investors believe there should be more supportive measures. The volatility we’ve seen so far this year will persist because there’s still uncertainty -- it isn’t a one-way road to higher prices.”
Presidential primaries move into focus today, with more delegates to be awarded than on any other day of the nomination race. Investors will also assess economic releases to gauge the possible trajectory of rate increases before the Federal Reserve’s next decision on March 16.
An Institute for Supply Management release is forecast to show an improvement in manufacturing activity in February. Still, Federal Reserve Bank of New York President William C. Dudley said that he was less confident in the inflation outlook following recent turbulence in financial markets. The probability of a rate boost this month is about 10 percent, rising to 21 percent for April.
As the earnings season draws to a close, about three-quarters of S&P 500 companies have beaten profit projections, while less than half topped sales forecasts. Medtronic Plc, Dollar Tree Inc. and AutoZone Inc. are scheduled to announce results today. Analysts estimate earnings at S&P 500 companies fell 4.2 percent in the fourth quarter, compared with Jan. 15 predictions for a 7 percent slump.
Among stocks moving on corporate news, Exelixis Inc. rose 9.6 percent in early New York trading after the biotechnology company announced losses below estimates. SunEdison Inc. tumbled 17 percent after the renewable-energy developer said it won’t release its financial results for 2015 on time. Marathon Oil Corp. lost 3.8 percent after joining a slew of U.S. producers selling shares to shore up their finances as they endure the worst market rout in a generation.
