Futures Rise as EU Debt Fears Ease
U.S. stock index futures pointed to a higher open Wednesday as fears of contagion from the European debt crisis eased as Spain vowed to slash its public deficit.
News that the US trade deficit edged higher in April to $40.42 billion caused little market reaction.
The enthusiasm clashed against some disappointing earnings news and a report that a Wall Street bank was under investigation.
Stocks swung between gains and losses during Tuesday's session before a finishing mixed. That followed Monday's 400-point surge for the Dow Jones Industrial Average, which has seen triple-digit moves in eight of the past ten sessions.
European stocks were higher after strong earnings results from the banking sector and news that Spain is planning to institute cuts that will save it $19 billion in 2010 and 2011.
Asian stocks ended mostly in the green, but the Nikkei 225 closed slightly lower.
"There's this tug-of-war in the markets now ... most investors are still trying to make up their minds," Pierre Gave, head of Asia research at GaveKal Holdings, told CNBC.
Dow component Walt Disney posted better-than-expected earnings after-the-bell Tuesday. But shares fell more than 3 percent in premarket trading as results at its media network division were considered disappointing by some analysts.
In other news, The Wall Street Journal reported that authorities are probing whether Morgan Stanley misled investors about mortgage derivative products it helped create and sometimes bet against. Shares fell 3.3 percent in premarket trading.
The dollar was mostly higher against a basket of foreign currencies, though the euro did post gains against the greenback.
In the latest earnings news, retailer Macy's matched earnings estimates of five cents a share and narrowly beat revenue projections. Its shares dropped 2 percent premarket.
Wednesday's economic numbers include the latest trade deficit figures, out at 8:30 am New York time, with economists looking for a March trade gap of $40.5 billion compared to February's deficit of $39.7 billion.
The government will also issue its April federal budget numbers, with a deficit of $45 billion representing the consensus forecast. At 7 am, the Mortgage Bankers Association is out with its weekly report on mortgage applications.
The Treasury will sell $24 billion in 10-year notes later, following strong demand at its 3-year note auction Tuesday. The results will be available shortly after 1 pm. Treasurys were lower in early trading, with the yield on the 10-year drifting higher to 3.55 percent ahead of the sale.
Grocer Whole Foods leads the list of companies scheduled to report earnings after the closing bell.
Videogame maker Electronic Arts also reported after the bell, and also beat consensus estimates for both revenues and earnings per share.
Meanwhile, Reuters is reporting that a private equity buyout is currently being negotiated for Fidelity National Information Services that could be worth around $15 billion.
Microsoft is rolling out a new version of its Office software suite to businesses, with the first versions of Office programs that will work in a Web browser and be free for consumers.
And Starbucks is stepping up marketing of its Seattle's Best Coffee brand to increase its presence and help the company compete against lower-priced rivals.