Futures Gain on Debt Relief, Earnings Hopes

Futures were higher Wednesday on hopes that U.S. lawmakers will reach a deal to raise the debt ceiling and avert a default as well as optimism over company earnings after Apple’s results beat the street.

The House passed a bill to raise the debt ceiling on Tuesday evening on condition of caps on current and future spending, but questions remain over whether bill will be approved in the Senate.

Earnings news also helped to send futures higher.

Apple surged after the iPod maker beat earnings expectations on Tuesday afternoon and hinted at a new product launch, which most analysts believe to be a new iPhone. At least five brokerages raised their price targets on the firm.

BlackRock and USBancorp rose after both firms posted earnings that beat Wall Street expectations.

Abbott Laboratories also rose after the pharmaceutical company reported better-than-expected earnings helped by strong sales growth in emerging markets and demand for its arthritis drug, Humira.

However, Johnson Controls slipped even after the auto parts maker reported a stronger-than-expected profit thanks to a fast recovery from the impact of the Japanese earthquake.

American Express , Intel , Qualcomm and Ebay among others are slated to post earnings after-the-bell tonight.

AMR jumped after the parent of American Airlines said it plans to purchase 460 narrowbody Boeing 737s and Airbus EADS A320s from 2013 through 2022.

Clorox advanced after billionaire investor Carl Icahn raised his offer to buy the household products company to $80 a share from $76.50 after the company rejected his previous offer.

News Corp remains in focus. The stock closed higher in the previous session after Rupert and James Murdoch testified to a UK parliamentary committee on the phone hacking scandal, with analysts pointing to a relief rally that the hearing did not uncover anything too damaging.

On the economic front, mortgage applications surged last week, marking the biggest increase in four months amid a flood of refinancing demand as interest rates remained low, according to the Mortgage Bankers Association.

German Chancellor Angela Merkel meets French President Nicholas Sarkozyin Berlin ahead of another meeting of European leaders to find a solution to Greece’s debt crisis. Merkel has already dampened expectations, saying the meeting will not yield a “spectacular” solution that will solve everything.

Coming Up This Week:

WEDNESDAY: Existing home sales, oil inventories; Earnings from AmEx, Intel, Qualcomm and Ebay
THURSDAY: Weekly jobless claims, Philadelphia Fed survey, money supply; Earnings from AT&T, Morgan Stanley, Nokia, PepsiCo, Freeport McMoran, Travelers, Mircrosoft, AMD and SanDisk
FRIDAY: No major econ. news expected; Earnings from Caterpillar, GE, McDonald's, Schlumberger, Verizon, Honeywell

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