Futures Still Up After Inflation, Housing News

Stock index futures remained higher after news that core inflation rose more than it has in two years, and that housing starts rose more than expected.

Futures already had risen on optimism about corporate earnings after investors paused for breath on Tuesday, reacting negatively to weaker-than-expected retail sales.

The core producer price index, excluding volatile food and energy prices, rose 0.5 percent in January compared with a 0.2 percent gain in December, the Labor Department reported Tuesday. The overall PPI rose 0.8 percent versus a 0.9 percent gain in December, the government said. Economists surveyed by Reuters had expected the core PPI to rise 0.2 percent.

Also, housing starts rose 14.6 percent to a seasonally adjusted annual rate of 596,000 units, compared with a downwardly revised gain of 520,000 units in December. The January jump was the to the highest level since since September.

Housing permits, however, fell 10.4 percent to a 562,000-unit pace last month, after a 15.3 percent gain in December. January permits were hurt by a 23.8 percent drop in multi-family permits.

In earnings news, Dell’s quarterly earnings outpaced Wall Street expectationsafter the closing bell on Tuesday, sending its shares 7 percent higher in extended trading.

CNBC.com-parent Comcast's shares rose after the company reported its profits rose to 36 cents a share, and that it would boost its dividend by 19 percent.Deere'sprofit doubled, sending its shares up 1.8 percent, while Abercrombie and Fitch gained after beating earnings expectations with a 95 percent jump in fiscal fourth-quarter profits. The teen retailer benefited from international sales, which rose 61 percent in the quarter compared with a 16 percent gain in the U.S.

In merger and acquisition news, Family Dollar skyrocketed after news Trian Capital, owned by Nelson Peltz, would take the discount retailer privatein a deal valued at $7.6 billion, according to a regulatory filing, CNBC reported. Rival Dollar Tree jumped on the news.

Sanofi-Aventis and will be in focus Wednesday after the French drugmaker agreed to buy the U.S. company $20.1 billion in cash. Genzyme shares rose in pre-marke trading.

BHP Billiton the world's biggest miner, reported earnings before the European open on Wednesday and said it would hand back $10 billion to shareholders through an expanded share buyback after nearly doubling its first-half profit to a record on booming iron ore and copper prices.

An earnings report published by French Bank Societe Generale showed profits nearly quadrupled in the final quarter of last year, thanks to a pick-up in its retail banking and core equities derivatives businesses.

The news boosted European banking shares in Wednesday morning trade.

Elsewhere in U.S. economic news, industrial production will be released at 9:15 a.m. and was expected to rise 0.6 percent, according to Briefing.com.

The big event of the day could be minutes from the Federal Reserve last meeting, released at 2 p.m. Traders will be watching that for any change in tone about the Fed's program of buying $600 billion in long-term Treasury securities to boost the economy, known as quantitative easing.

Also, Treasury Secretary Tim Geithner testifies before both the Senate Finance committee at 10 a.m. and the House Budget Committee meets at 2 p.m. on President Obama' s budget.

On the Calendar:

WEDNESDAY: House hearing on FCIC report, oil inventories, FOMC minutes; earnings after-the-bell from CBS, NetApp and Nvidia.
THURSDAY: Weekly jobless claims, CPI, leading indicators, Philadelphia Fed survey, Chicago Fed President speaks, money supply; earnings before-the-bell from Barrick Gold, AngloGold and Nordstrom.
FRIDAY: Earnings before-the-bell from Campbell Soup.

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