NEW YORK (Reuters) – Stock futures rose on Thursday, building on the previous session’s steep gains, on expectations of progress toward a fiscal agreement in Washington that would avert an economic meltdown.
Market participants will continue to focus on discussions in Congress to avoid big spending cuts and tax hikes – dubbed the “fiscal cliff” – and equities may retreat, as they did Tuesday, if the upbeat negotiation environment in Washington shifts.
“There will be a deal before December 31 to avert the economy facing disaster,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
“We’re back on track for a year-end rally to continue,” he said, highlighting the continued support the Federal Reserve has given to equity markets.
Investors await data, including the second estimate of third-quarter gross domestic product, due at 8:30 a.m. ET (1330 GMT). Economists in a Reuters survey forecast a 2.8 percent annualized pace of growth, compared with a 2.0 percent rate in the first estimate.
The Commerce Department will issue preliminary corporate profits for the third quarter at 8:30 a.m. (1330 GMT). At the same time, the Labor Department will release first-time claims for jobless benefits; 390,000 new filings are forecast, compared with 410,000 in the prior week.
The yield on Italy’s 10-year bonds fell to the lowest in two years at an auction, amid relief that immediate risks over Greece had diminished.
“The fact that the bond sales in Europe went well suggest confidence is beginning to reenter some of the peripheral nations and that is a good sign,” Cardillo said.
The euro flirted with the $ 1.30 level and boosted commodity prices, which could lift the basic materials and energy stock sectors.
S&P 500 futures rose 9 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 78 points, and Nasdaq 100 futures added 17.5 points.
Also due for release Thursday are pending home sales for October at 10:00 a.m. (1500 GMT) and the Federal Reserve Bank of Kansas City November manufacturing survey at 11:00 a.m.
Tiffany shares fell 9 percent to $ 58.02 in premarket trading after the upscale jeweler reported quarterly results and lowered its full-year sales and profit forecasts.
U.S.-listed shares of BlackBerry maker Research In Motion soared 11.7 percent to $ 12.40 in premarket trading after Goldman Sachs upgraded the stock to “buy” from “neutral.”
Kroger , the biggest U.S. supermarket operator, is due to report third-quarter earnings.
On Wednesday, the Dow Jones industrial average <.DJI> rose 106.98 points, or 0.83 percent, to 12,985.11. The S&P 500 <.SPX> gained 10.99 points, or 0.79 percent, to 1,409.93. The Nasdaq Composite <.IXIC> added 23.99 points, or 0.81 percent, to close at 2,991.78.
(Editing by Bernadette Baum)
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