BLBG: U.S. Stock-Index Futures Maintain Gain After Housing, Price Data
By Michael P. Regan
Dec. 16 (Bloomberg) -- U.S. stock-index futures maintained gains after government reports showed inflation and housing starts matched economists’ estimates in November.
Futures on the Standard & Poor’s 500 Index expiring in March added 0.4 percent to 1,108.6 at 8:33 a.m. in New York. Dow Jones Industrial Average futures increased 0.4 percent to 10,438.
The S&P 500 has rebounded 65 percent from a 12-year low in March after the U.S. government lent, spent or guaranteed more than $11 trillion to end a four-quarter contraction.
Fed Chairman Ben S. Bernanke and his colleagues may indicate the economic recovery is gaining strength while repeating a pledge to keep the benchmark interest rate almost at zero for an “extended period.”
The FOMC gathers as growth in the final quarter of 2009 accelerates to more than 4 percent, the fastest pace in almost four years, according to analysts’ forecasts. The committee will probably discuss how to eventually withdraw unprecedented programs to revive credit, including purchases of $1.43 trillion in housing debt, according to some economists. The policy statement is due around 2:15 p.m.
The U.S. economy may expand 3 percent to 4 percent next year, supported by a recovery in investment, job creation and fiscal and monetary stimulus, Princeton University economist Alan Blinder wrote in an article published on the Wall Street Journal’s Web site.
The S&P 500 may rise about 8 percent to 1,200 by the end of next year, according to Morgan Stanley, which said it prefers stocks in North America over European shares. The benchmark index for U.S. equities will probably reach a peak early in 2010 before hitting a trough in the second or third quarter and a “comeback towards year-end,” Morgan Stanley strategists Jason Todd and Gerard Minack wrote in a report.
They have a “neutral” stance on North America, compared with an “underweight” position on Europe and the U.K., saying that U.S. stocks are “less vulnerable to sovereign stress and banks now less leveraged.”
Morgan Stanley’s forecast compares with an average projection for the S&P 500 to end 2010 at 1,223, according to the average of 10 projections in a Bloomberg News survey published Dec. 14.
