By Anora Mahmudova and Carla Mozee, MarketWatch
NEW YORK (MarketWatch) -- U.S. stock futures trimmed some of the
gains ahead of the regular market open while banking heavyweight
Wells Fargo & Co. extended a run of rising profits, though
per-share earnings were in line with expectations.
Investors also will monitor appearances by three Federal Reserve
speakers for any comments they may make about the future of
interest rates.
Futures for the Dow Jones Industrial Average (DJU4) were 15
points, or 0.1%, higher at 16,857, while those for the S&P 500
index (SPU4) gained 2 points, or 0.1%, to 1,959.90. The Nasdaq 100
index (NDU4) tacked on 10 points, or 0.3%, to 3,883.75.
Wells Fargo & Co. (WFC) said its second-quarter profit rose
even as revenue declined. Per-share earnings were $1.01 and in line
with expectations, but revenue decline was less than expected.
Shares were slightly lower in premarket.
This quarter marks Wells Fargo's 18th consecutive quarter of
rising profits, despite sluggish results from its peers.
Worries about the fragility of Europe's banking system triggered
losses on Wall Street Thursday, but the S&P 500 index (SPX),
the Dow Jones Industrial Average (DJI) and the Nasdaq Composite
(RIXF) finished well off session lows.
European stocks were bouncing back Friday after Thursday's drop,
which came as Portuguese conglomerate Espírito Santo International
SA this week missed a payment on some short-term debt. That sent
shares of its subsidiaries, Banco Espirito Santo AS and Espirito
Santo Financial Group SA, spiraling lower.
"The fact Europe is rebounding from yesterday's sell-off is
helping cheer Wall Street futures," said Joao Monteiro, analyst at
Valutrades, in a note Friday. The Dow industrials are "in easy
reach of 17,000, so assuming there are no other surprises -- and
based on the assumption that a degree of short covering ahead of
the weekend break is as good as inevitable -- then the week could
well end on a positive tone in New York."
Fed speakers
With the market trying to pin down when interest rates will be
raised by the Federal Reserve, appearances by central bank
officials are of interest to investors. In Jackson Hole, Wyo.,
Philadelphia Fed President Charles Plosser at 11:15 a.m. Eastern
Time will moderate a panel on entrepreneurial issues at the Global
Interdependence Center's Rocky Mountain Summit.
Plosser -- known as a hawk -- is a voting member of the Fed's
policy committee this year. Plosser last month said the federal
funds rate should be raised starting in the third quarter, and that
rates should be higher because the central bank is nearing its
goals faster than many expected.
At 3 p.m. Eastern Time, Charles Evans, the president of the
Chicago Fed, and Dennis Lockhart, president of the Atlanta Fed
Bank, will be on a panel about success and failures of Fed policy.
Lockhart has said he expects short-term rates will be held at zero
until the latter half of 2015, while Evans has said it may not be
until 2016 that the Fed starts on its rate-hike path. Evans and
Lockhart are not voting members on the policy committee this
year.
Also on the radar Friday, tobacco giant Reynolds American Inc.
(RAI) confirmed that it's in talks with Lorillard Inc. (LO) about a
possible acquisition. Lorillard shares rose nearly 5% in premarket
trade.
Fastenal Co. (FAST), which makes fasteners, tools and other
industrial and construction supplies, reported second-quarter
earnings of 44 cents a share on sales of $949.9 million. Analysts
polled by Thomson Reuters were expecting per-share earnings of 44
cents on revenue of $952.5 million. Shares fell 1% in scant
premarket volume following the results.
An influential broadcaster in China said the location-tracking
function in Apple Inc.'s (AAPL) iPhone was a "national security
concern," in the latest backlash against U.S. tech firms.
Late Thursday, apparel retailer Gap Inc. (GPS) reported an
unexpected 2% drop in same-store sales in June. Shares fell more
than 1% in late trading Thursday.
In other markets Friday, crude for August delivery (CLQ4) fell
37 cents, or 0.4%, to $102.55 a barrel. August gold (GCQ4) fell $2
to $1,337.3 an ounce. Overnight in Asia, Japan's Nikkei Average
fell 0.3% and Hong Kong's Hang Seng Index ended flat.
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