BLBG: U.S. Index Futures Gain After S&P 500 Record; Facebook Up
U.S. stock-index futures advanced, signaling the Standard & Poor’s 500 Index will extend a record, as results from Facebook Inc. (FB) to Ford Motor Co. (F) topped analysts’ estimates.
Facebook jumped 8.8 percent after saying second-quarter sales surged 61 percent. Ford gained 1.6 percent as profit topped estimates. Qualcomm Inc. (QCOM) declined 4.9 percent after forecasting quarterly profit that may trail projections. General Motors Co. lost 2.2 percent after reporting quarterly profit that missed analysts’ projections.
S&P 500 futures expiring in September added 0.2 percent to 1,984.7 at 8:32 a.m. in New York. Dow Jones Industrial Average contracts gained 25 points, or 0.2 percent, to 17,050.
“I’m quite impressed with the results I’ve seen till now,” said Pierre Mouton, who helps oversee $8 billion at Notz, Stucki & Cie. in Geneva. “In most cases, we’ve had companies beating on revenues and earnings, and posting positive outlooks. I don’t think the market can go much higher in the short term because it’s overbought, but I don’t expect any meaningful correction. In the medium term, I’m not concerned.”
The S&P 500 (SPX) rose 0.2 percent yesterday as Apple Inc. helped push technology companies higher, while health-care stocks rallied on earnings. The gauge has advanced 7.5 percent this year amid better-than-estimated corporate results and central-bank support. The index trades at 18.4 times the reporting earnings of its members, the highest since 2010.
Manufacturing Readings
Global equities advanced today after reports showed euro-area manufacturing and services grew this month while Chinese factory activity rose to an 18-month high in July.
The Markit manufacturing PMI for the U.S. probably rose to 57.5 in July from 57.3 the previous month, a report may show at 9:45 a.m. in Washington today. Readings above 50 indicate expansion.
Separate data at 10 a.m. will probably show that U.S. new-home sales fell 5.8 percent in June after jumping 18.6 percent in May.
Another release showed the number of Americans filing applications for unemployment benefits unexpectedly dropped last week to the lowest level in more than eight years. Jobless claims fell by 19,000 to 284,000 in the week ended July 19, the fewest since February 2006 and lower than any economist surveyed by Bloomberg forecast.
Fifty companies in the S&P 500 including Visa Inc., Amazon.com Inc. and Starbucks Corp. report earnings today. About 77 percent of those that have posted results this season have beaten analysts’ estimates for profit, while 64 percent exceeded sales projections, according to data compiled by Bloomberg.
Facebook, TripAdvisor
Profits at S&P 500 members probably rose 6.2 percent in the second quarter, while sales gained 3.3 percent, according to analyst estimates compiled by Bloomberg.
Facebook climbed 8.8 percent to $77.57. The operator of world’s biggest social network said second-quarter sales jumped to $2.91 billion, beating the $2.81-billion average estimate of analysts in a Bloomberg survey. Promotions on mobile devices accounted for 62 percent of advertising sales, up from 59 percent in the previous period, it said.
Microblogging service Twitter Inc. climbed 3 percent to $38.88.
Ford rose 1.6 percent to $18.06 after posting a 21st consecutive profitable period as sales in China increased and it had its first profit in Europe in three years. The second-largest U.S. automaker reported second-quarter profit excluding one-time items of 40 cents a share, beating the 36-cent average projection.
Gilead Sciences Inc. (GILD) gained 1.2 percent to $91.40. The drugmaker forecast 2014 product sales of $21 billion to $23 billion, doubling its previous estimate, amid better-than-estimated revenue from its hepatitis C treatment Sovaldi. The pill had sales of $3.48 billion in the second quarter, beating the $3 billion average analyst estimate.
Qualcomm dropped 4.9 percent to $77.60. The chipmaker projected that net income in the quarter ending in September will be $1.03 to $1.18 a share, trailing the $1.23 average analyst estimate. The company cited challenges to its technology-licensing business in China.
GM dropped 2.2 percent to $36.60. The carmaker reported that profit excluding one-time items was 58 cents in the second quarter, missing the average projection of 59 cents. The biggest U.S. automaker said it will spend at least $400 million to compensate victims of the 2.59 million compact cars with potentially faulty ignition switches.
TripAdvisor Inc. (TRIP) slumped 11 percent to $95.45. The online travel service posted second-quarter adjusted earnings of 55 cents a share, missing the 61-cent projection of analysts in a Bloomberg survey.
To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net
To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Jeremy Herron, Srinivasan Sivabalan
