Wall Street to rise slightly on data, ECB cash pump
Wall Street stocks were set to open slightly higher on Wednesday on stronger-than-forecast U.S. growth data and after European banks borrowed more than a half trillion euros as part of an effort to stabilize the euro zone's financial system.
The stock market is seen adding to the previous day's gains that catapulted the Dow industrials and the S&P 500 above key levels to close at multi-year highs.
Data showed the economy grew slightly faster than initially thought in the fourth quarter on firmer consumer and business spending.
This shows a steady improvement despite all the volatility in stock prices we had last year and shows that we are nowhere near lapsing back to recession, said Tim Ghriskey, chief investment officer at Solaris Group in New York.
Even though the figure looks back to the end of 2011, it could have a modest impact on the market as it confirms the momentum the world's largest economy had coming into 2012.
European banks grabbed a more-than-expected 530 billion euros in the European Central Bank's second offering of low-cost 3-year loans, fueling hopes more credit will flow to businesses and government borrowing costs will ease further.
The cash injection takes the European credit crisis out of the spotlight in the short term, leaving traders and investors to focus on fundamentals according to Stephen Wood, chief market strategist at Russell Investments in New York.
An index of European bank shares <.SX7P> rose 1.2 percent while a pan European benchmark index <.FTEU3> added 0.4 percent.
S&P 500 futures rose 1.4 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures gained 8 points, and Nasdaq 100 futures added 4 points.
The Dow closed above 13,000 for the first time since May 2008 on Tuesday, while the S&P ended above 1,370, its May 2011 intraday high, possibly enticing money managers afraid to miss out on gains. But some analysts warned this year's rally has come in lighter volume, and further gains could trigger selling.
Daily volume on the New York Stock Exchange, NYSE Amex and Nasdaq has averaged 6.87 billion shares in February. The average in February 2011 was 7.81 billion.
Focus on economic data will continue as the February Chicago Purchasing Managers Index reading is expected at 9:45 a.m. EST (1445 GMT). Economists see the gauge at 61.5, compared with 60.2 in January.
On the earnings front, warehouse club operator Costco Wholesale Corp
(Reporting by Rodrigo Campos additional reporting by Angela Moon; editing by Jeffrey Benkoe)
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