MW: U.S. stocks: Futures extend gains after housing starts
NEW YORK (MarketWatch) — U.S. stock futures hit new premarket highs after a stronger-than-expected jump in July housing starts, adding to upside momentum sparked by a stronger tone in Europe and positive earnings.
Home Depot Inc. was among the biggest advancers in premarket trade.
Futures for the Dow Jones Industrial Average DJU4, +0.25% rose 54 points, or 0.3%, to 16,847, while S&P 500 index futures SPU4, +0.22% added 4.8 points, or 0.2%, to 1,972.50. Nasdaq-100 index futures NDU4, +0.24% gained 11 points, or 0.3%, to 4,024.25.
The Commerce Department on Tuesday said construction on U.S. new homes rose 15.7% in July to an annual rate of 1.09 million versus 973,000 in June. Economists surveyed by MarketWatch had penciled in July starts of 975,000.
The Labor Department, meanwhile, said U.S. consumer prices rose 0.1% in July, matching forecasts. Core CPI, which strips out food and energy, also rose 0.1%, a touch below expectations for a 0.2% increase.
On Monday, the Nasdaq Composite COMP, +0.97% rose 1%, or 43.39 points, to 4,508.31, its highest close since March 31, 2000, while the Dow industrials DJIA, +1.06% jumped 175.83 points, or 1.1%, to 16,838.74, the biggest point gain since Aug. 8.
Wouter Sturkenboom, strategist at Russell Investments in London, said he is modestly positive on markets. “Yesterday was probably a reaction to the unwarranted volatility on Friday, but the rest of the week is going to be about the FOMC (Federal Open Market Committee) minutes and Jackson Hole conference,” he said in emailed comments.
“On both counts, we and the market expect the prevailing dovish stance to hold, providing upside momentum for markets,” he added, but said owing to valuation concerns, his firm remains neutral on U.S. stocks. Valuation worries have been a persistent theme among some market observers, with Yale Professor Robert Shiller weighing in over the weekend.
This week will see the release of the Fed minutes, due Wednesday, and a speech from Federal Reserve Chairwoman Janet Yellen at Jackson Hole, Wyo., on Friday.
Home Depot among stocks to watch
Home Depot HD, +3.84% shares rose more than 3% in premarket trading, after the company lifted its earnings view for 2014 and posted a 5.8% rise in second-quarter same-store sales.
Medtronic MDT, +0.35% ahead of the bell posted first-quarter adjusted earnings of 93 cents a share, a penny a share higher than analysts covering the medical device maker had projected.
In overseas markets, Japanese stocks NIK, +0.83% rose for a seventh day, boosted by Wall Street gains from Monday. European stocks SXXP, +0.39% pushed higher, led by a 5% rise for Danish shipping and oil conglomerate A.P. Møller-Maersk AS MAERSKB, +4.96% Oil CLU4, +0.46% and gold GCZ4, +0.18% added modest gains, while the dollar BUXX, +0.19% held steady.
