Futures rise ahead of sentiment, home sales data
Stock index futures were higher on Friday, extending gains that have taken equities near highs not seen since before the 2008 collapse of Lehman Brothers.
With the S&P has risen for four of the past five days and is up 8.4 percent for the year, analysts worried that a pullback could be in sight. Gains have come on the back of improved domestic economic data and signs Europe was making progress in dealing with the sovereign debt crisis.
The swiftness and magnitude of the gains have some analysts calling for a correction, and weak economic data could serve as a catalyst for a pullback.
We're rapidly approaching the point where expectations are so high we could sell off on even in-line numbers, said James Dailey, portfolio manager at TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.
I'd be shocked if we can move much higher on this leg, Dailey said. We need some consolidation since we've pretty much gone straight up since October.
European shares rose 0.2 percent on expectations the European Central Bank will offer cheap loans to banks at next week's three-year refinancing operation.
Banks, a sector closely tied to economic growth prospects, ticked higher in premarket trading. Bank of America Corp
S&P 500 futures rose 2.8 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 36 points, and Nasdaq 100 futures rose 5.25 points.
The benchmark S&P 500 index was not far from 1,370, considered the upper end of a technical barrier and a level not since 2008. In the past four sessions, the S&P has hovered around 1,360 and closed at a 9-month high on Thursday.
The February Thomson Reuters/University of Michigan Surveys of Consumers will be released at 9:55 a.m. EST and is expected at 73 versus 72.5 in the preliminary February report.
In addition, January new home sales will be released at 10:00 a.m. EST, and the forecast called for 315,000, compared with 307,000 last month.
U.S. crude oil futures rose 0.4 percent while the U.S. dollar index <.DXY> was down 0.4 percent. Investors have worried that a recent spike in crude prides could weigh on consumer spending.
If it goes much higher, it will be a hurdle for an economy that is already vulnerable, Dailey said.
American International Group Inc
Salesforce.com
J. C. Penney Co Inc
Washington Post Co
According to Thomson Reuters data through Thursday morning, of the 446 in the S&P 500 that have reported earnings, 63 percent topped expectations. That was below the 70 percent average beat in the past four quarters, but slightly above the average of 62 percent since 1994.
Equities rose on Thursday after data showed the U.S. labor market remained on the mend, but they stalled as the market approached lofty levels.
(Reporting by Ryan Vlastelica; editing by Jeffrey Benkoe)
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