BLBG: U.S. Stock-Index Futures Advance Before Earnings Reports
U.S. stock-index futures advanced, indicating the Standard & Poor’s 500 Index will rebound from its worst three-day drop since 2011, as investors awaited earnings from companies including Citigroup Inc.
Futures on the S&P 500 (SPX) expiring in December added 0.2 percent to 1,869.3 at 7:27 a.m. in New York, after earlier gaining as much as 0.7 percent. U.S. equities have lost almost $744 billion in value since Oct. 8 amid concern that slower global growth could hurt America’s economic recovery just as the Federal Reserve gauges when to raise interest rates. Dow Jones Industrial Average contracts rose 26 points, or 0.2 percent, to 16,258 today. Russell 200 Index futures climbed 0.7 percent.
The S&P 500 has fallen 6.8 percent from its Sept. 18 record, paring its gains this year to 1.4 percent. The index fell to its lowest level since May yesterday, below its 200-day average for the first time in two years. The Chicago Board Options Exchange Volatility Index, the gauge known as the VIX, rose 16 percent to its highest level since June 2012. The measure has soared 63 percent in the past three days.
“The market will rebound because it has been a pretty fierce sell-off and investors reached an extreme risk aversion,” said Thomas Thygesen, head of cross-asset strategy at Skandinaviska Enskilda Banken AB in Copenhagen. “You can’t keep that selling momentum forever. Concerns that slower global growth would affect the U.S. have been overdone. We know the Fed will only adjust interest rates once the time is right, and they have reassured markets.”
Earnings Reports
Investors are watching earnings reports after Alcoa Inc. unofficially kicked off the U.S. results season last week. Johnson & Johnson, the world’s biggest maker of consumer health products, will report third-quarter financial results before the start of trading today, along with banks Citigroup and Wells Fargo & Co. Chipmaker Intel Corp. reports after the close.
JPMorgan Chase & Co. dropped 0.3 percent to $58 in early trading after the biggest U.S. bank posted third-quarter profit of $5.6 billion. Net income was $1.36 a share, compared with a loss of $380 million, or 17 cents, a year earlier on legal and regulatory costs, according to a statement. Analysts on average had forecast EPS of $1.39.
Some 53 S&P 500 companies are scheduled to release earnings this week, according to data compiled by Bloomberg. Profit for members of the index probably rose 4.8 percent in the third quarter and sales gained 4.2 percent, analysts projected.
Orbitz Worldwide Inc. added 1.5 percent to $7.53 as FBR & Co. raised its rating on the stock to outperform, similar to a buy recommendation.
GoPro Inc. slipped 3 percent to $74.35 in early trading, signaling a fifth day of losses. The shares slumped 9.9 percent yesterday after reports linked the sports-camera maker to the ski accident of retired race-car driver Michael Schumacher.
To contact the reporter on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net
To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Alan Soughley