BLBG: U.S. Stock Futures Climb As Draghi Pledges Euro Defense
U.S. stock-index futures advanced, erasing earlier losses, as European Central Bank President Mario Draghi said policy makers will do everything in their power to ensure a survival of the euro.
Bank of America Corp. (BAC) rose in pre-market New York trading. Visa Inc. (V) climbed 2.5 percent after earnings beat estimates. Facebook Inc. (FB), which will issue its first earnings report as a publicly traded company today, sank 7.1 percent after Zynga Inc., the biggest provider of games on the social network, reported profit that missed estimates. Zynga tumbled 39 percent.
Standard & Poor’s 500 Index futures expiring in September rallied 1.1 percent to 1,350 at 7:12 a.m. in New York, having previously fallen as much as 0.5 percent. The benchmark gauge has declined 2.8 percent over the past four days as concern grew that Europe’s debt crisis is deepening and a Chinese central- bank adviser said growth may slow further. Contracts on the Dow Jones Industrial Average added 126 points, or 1 percent, to 12,763 today.
“Within our mandate, the ECB is ready to do whatever it takes to preserve the euro,” Draghi said during a speech in London today. “And believe me, it will be enough.”
The comments spurred speculation that the ECB will make further purchases of government bonds to bring down surging debt yields in Spain and Italy.
Investors want Draghi’s “words to be backed up with action,” Derek Halpenny, European head of global markets research at Bank of Tokyo-Mitsubishi UFJ Ltd. in London, said in an Bloomberg Television interview. “I would expect the markets to be bracing for some reactivation and some actual buying on the secondary bond markets to try and bring Spanish yields back down.”
Fed Speculation
Worse-than-expected economic data has intensified bets the Federal Reserve is moving closer to taking new steps to spur economic growth. Fed Chairman Ben S. Bernanke last week said policy makers are studying options for further easing that could be deployed in case economic growth remains too feeble to produce a lasting decline in unemployment. The Federal Open Market Committee meets next week.
Data today may show orders for U.S. durable goods cooled in June. The projected 0.3 percent gain in bookings for goods meant to last at least three years would follow a 1.3 percent increase in May, according to the median forecast of economists surveyed by Bloomberg News. Separate figures may show claims for jobless benefits remained elevated and contracts to purchase previously owned homes rose at a slower pace.
Earnings Season
More than 60 members of the S&P 500 are releasing quarterly results today. Of the 219 companies in the gauge to have reported so far, 72 percent have beaten estimates, according to data compiled by Bloomberg.
Bank of America, the second-largest U.S. lender by assets, increased 0.7 percent to $7.12.
Visa rose 2.5 percent to $125.20 in Europe after reporting fiscal third-quarter profit excluding legal costs that beat estimates. The world’s biggest payments network said adjusted net income for the three months ended June 30 climbed to $1.06 billion, or $1.56 a share, from $883 million, or $1.26, a year earlier. The average estimate of 34 analysts surveyed by Bloomberg was $1.45 a share.
Facebook dropped 7.1 percent to $27.25 in pre-market New York trading. The company, which reports after the close of markets, will announce second-quarter profit of 11 cents a share excluding some items, according to the average analyst projection in a Bloomberg survey.
Zynga (ZNGA) plunged 39 percent to $3.09 missing analysts’ second- quarter revenue and profit estimates. The games developer posted sales of $332.5 million, less than the average $343.1 million analyst projection compiled by Bloomberg. Excluding some items, profit was 1 cent a share, trailing the 6-cent estimate.
Dow Chemical Co. (DOW), the largest U.S. chemical company by sales, slid 4.2 percent to $29 in early trading as second- quarter profit and revenue missed estimates.
To contact the reporter on this story: Tom Stoukas in Athens at astoukas@bloomberg.net
To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net
