Futures Boosted by Strong Earnings, Deals
U.S. stock index futures gained ahead of the open Tuesday as a clutch of strong earnings Monday after the market closed, and another big acquisition, helped to boost investor sentiment.
Still, low volumes and a lack of driving economic news could bring volatility in the near term, according to Andrew Kanaly, chairman of Kanaly Trust Company.
"You might be looking for a little selloff here before you jump in completely into this little rally we’ve got on the year end," Kanaly told CNBC.
European shares rose with mining stocks leading the gainers. Concerns over the euro zone debt crisis continued after Moody's warned it may downgrade Portugal's debt rating.
China voiced its concern over the state of European debt and urged more action to stem the problems. Asian stocks ended higher across the board as geopolitical tensions in Korea eased.
In a note to clients, Jim O'Neill, chairman of Goldman Sachs Asset Management, declares 2011 the year the U.S. will return to "normal." Stocks will keep rising, probably another 20 percent, O'Neill wrote, and bond yields will rise as well, although perhaps shy of 5 percent, which he predicted earlier. O'Neill also expects the dollar could rally, although "U.S. policymakers will be eager to resist a significant increase."
Toronto-Dominion Bankagreed to buy Chrysler Financialfrom private equity firm Cerberus Capital Management for $6.3 billion.
Shares of Adobe Systems looked set to gain at the open after the computer-software maker posted better-than-expected earnings after the close Monday.
Shares of PayChex and Jabil Circuit also rose in after-hours trading following earnings reports. But Darden Restaurants fell after the company issued guidance that missed forecasts. ConAgra Foods, meanwhile,fell slightly after releasing disappointing fiscal second quarter profitsand confirming low single-digit earnings growth rate for fiscal 2011.
Car Max shares also fell despite reports profits and sales above expectations on strong sales of used cars.
In other news, Toyota agreed to pay the U.S. government $32.4 million to settle an investigation in the wake of two recalls over accelerator pedals and steering relay rods.
And Dutch group DSMplans to buy vitamin-maker Martek Biosciencesfor $1.1 billion.
The Securities and Exchange Commission is investigating the resignation of Hewlett-Packard's ex-CEO Mark Hurd, according to The Wall Street Journal.
And 3M denied reports that its top executive, George Buckley, was preparing to leave the company before his contract expired in early 2012.
On the Calendar This Week:
TUESDAY: FCC votes on net neutrality; earnings from ConAgra and Nike.
WEDNESDAY: MBA mortgage applications, GDP, existing home sales, oil inventories; before-the-ell earnings from Walgreen; after-the-bell earnings from Bed, Bath & Beyond.
THURSDAY: NYSE early close; durable goods orders, personal income and spending, weekly jobless claims, consumer sentiment, new home sales.
FRIDAY: Markets closed for Christmas.
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