Stocks set for higher open on Fed stimulus hopes
The S&P 500 was set to rise about 1 percent at the open on Wednesday, as the previous day's comments from Federal Reserve officials heightened hopes of further monetary stimulus to boost the economy.
Wall Street stocks ended higher on Tuesday after minutes released from the most recent Fed board meeting indicated several policymakers backed more monetary easing.
With the markets on the cusp of seeing very important economic data over the next three days, comments yesterday from Fed voting members (Charles) Evans and (Narayana) Kocherlakota have changed the dynamic in terms of what the market response will be. The question is how long it will last, said Peter Boockvar, equity strategist at Miller Tabak + Co in New York.
The Fed discussed a range of unusual tools to help the economy, including tying the path of interest rates to either unemployment or inflation.
U.S. private sector job growth slowed in August for the second month in a row with 91,000 positions added, payrolls processor ADP reported. The data comes ahead of the Labor Department's much-anticipated August nonfarm payrolls report due on Friday.
We haven't seen a whole lot of announcements of either hiring or firing, so I don't think the jobs number on Friday will be much of a surprise either way, said Kevin Kruszenski, director of equity trading at Keybanc Capital Markets in Cleveland.
S&P 500 futures gained 15.5 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 rose 117 points, and Nasdaq 100 futures added 21 points.
The S&P 500 is on track for its worst month since May 2010. After the United States credit rating was downgraded in early August, the index posted one of its worst weeks since the depths of the financial crisis in 2008.
At 9:45 a.m. EDT (1345 GMT), the Institute of Supply Management-Chicago releases its August index of manufacturing activity. Economists forecast a reading of 53.5 in the month, compared with 58.8 in July.
The Commerce Department reports July factory orders at 10:00 a.m. EDT (1400 GMT). Economists forecast a rise of 1.9 percent, compared with a 0.8 percent drop in the prior month.
Bank of America Corp
The FTSEurofirst 300 <.FTEU3> index of top European shares rose 2.1 percent, extending the previous session's steep gains on hopes about the U.S. Fed adding stimulus.
(Additional reporting by Rodrigo Campos; editing by Jeffrey Benkoe)
© Copyright Thomson Reuters 2024. All rights reserved.