Wednesday October 7th

7-10-2015

Stocks seen higher, earnings eyed

U.S. stock index futures pointed to a stronger open on Wednesday, tracking shares in Europe and Asia higher. Dow Jones futures were up about 100 points higher, while S&P 500 and Nasdaq futures also pointed to a higher open. Continued gains in oil added support, with crude up more than 1.5 percent above $49 a barrel and brent trading above $52 a barrel. In company news, brewer AB InBev was in focus after the group made a third bid of £42.15 per share for British rival SABMiller. SABMiller said it rejected Anheuser-Busch InBev's raised bid, which would have given it a value of nearly £68 billion ($103.6 billion). Stocks closed mixed Tuesday, with the Dow Jones industrial average eking out its first three-day winning streak since Aug. 17. The S&P 500 closed 7 points lower at 1,979.92, ending five straight days of gains. Monsanto and Constellation Brands will be among the few firms reporting before the bell Wednesday. Alcoa reports after the close Thursday, unofficially kicking off earnings season. PepsiCo gave some investors hope of a positive earnings season with results that beat on both the top and bottom line. The firm also raised its full-year forecast. Yum Brands disappointed on the top and bottom lines, however, sending its shares sharply lower in premarket trading. No Fed speakers are scheduled to speak Wednesday ahead of the FOMC meeting minutes out Thursday afternoon ET. Weekly mortgage applications rose 25.5 percent amid anxiety over new mortgage regulations, the Mortgage Bankers Association said Wednesday. Energy shares across Asia climbed Wednesday after oil prices surged overnight, helping to pull most Asia markets into positive territory. In Japan, energy play Inpex climbed 7.2 percent. But the Nikkei was volatile in the afternoon session, trading down as much as 0.8 percent after the Bank of Japan (BOJ) left its policy unchanged at its closely watched policy meeting Wednesday. But the index later recovered, ending up 0.8 percent. Oil prices rose on Wednesday after data showed the U.S. market was beginning to tighten, with falling supply and lower inventories after two years of heavy surplus. U.S. crude stocks decreased by 1.2 million barrels last week while distillate stockpiles also fell, data from industry group the American Petroleum Institute (API) showed. The figures suggest U.S. oil production, particularly from shale, is beginning to decline in response to the collapse in prices over the last year. Benchmark Brent crude has dropped to around $50 from a high above $115 a barrel in June 2014 and many oil companies are losing money with oil prices at current levels. Brent was up 91 cents a barrel at $52.83 by 8:26 a.m. EDT (1226 GMT), having jumped as much as $3 on Tuesday to close above $50 for the first time in a month. U.S. light crude trade at $49.38, up 85 cents a barrel, after touching a session high of $49.71. Gold steadied on Wednesday, supported by sluggish U.S. economic data which increased expectations that the Federal Reserve will delay raising U.S. interest rates until next year. Spot gold rose 0.35 percent to $1,149.81 an ounce, after earlier touching $1,152.90, its highest level since Sept. 24.