Stocks were poised for a sharply higher open thanks to momentum generated by powerful after-hours earnings reports Tuesday.
The pre-market enthusiasm was raised a notch by a handful of economic reports showing tame inflation, increased manufacturing activity in the New York region and another rise in mortgage applications.
Wall Street has reestablished positive momentum, and that's likely to continue Wednesday morning after Intel beat expectations with its after-the-bell earnings report late Tuesday, and issued guidance that was well above consensus as well. Intel shares rose about 7.5 percent in premarket trading.
The major indexes were set to gain nearly 1 percent each at the opening as investors prepare for an onslaught of economic data and more earnings. Stocks are coming off their best two-day gain since the beginning of June.
In the first report of the day, mortgage applications rose for a second straight week, driven by a jump in demand for home refinancing loans as interest rates tumbled, according to the Mortgage Bankers Association.
On the down side of earnings Yum Brands, the parent of KFC, Taco Bell, and Pizza Hut, also reported better-than-expected quarterly earnings reports but shares fell when the company lowered its outlook. Yum was off 3.4 percent premarket.
Abbott Labs is the biggest name to be reporting quarterly numbers Wednesday. American Airlines parent AMR will report at an undetermined time today, while uniform maker Cintas and chipmaker Xilinx are among those scheduled to report after the closing bell.
The biggest event of the day may well be the minutes of the most recent FOMC meeting, which will be out at 2 pm New York time. Once again, investors will be looking not only for positive comments about an economic recovery, but also further insight into any possible exit strategies from the Fed's expanded balance sheet, zero interest rates, and other extraordinary measures designed to deal with the economic crisis.
At the same time, the New York Federal Reserve Bank issues its Empire State Manufacturing Index, a measure of New York state manufacturing activity. The Mortgage Bankers Association will have its weekly report on mortgage applications at 7 am.
At 9:15 am, the Federal Reserve has June figures on industrial production and factory capacity utilization. The consensus forecast is for a drop of 0.6 percent in industrial production, with capacity utilization at 67.9 percent.
CIT Group will garner more investor attention, with the Wall Street Journal reporting regulators are negotiating a detailed aid plan for the troubled commercial lender.
- Written by Peter Schacknow, Senior Producer, CNBC.com