By Barbara Kollmeyer, MarketWatch
ADP employment data will also give clues to jobless levels
MADRID (MarketWatch) -- Stock futures moved higher on Wednesday
ahead of data expected to show growth in the U.S. economy, and the
outcome of the Federal Reserve's meeting.
Tech stocks were already shining as shares of Twitter Inc.
(TWTR)surged in heavy premarket volume after the social media
network's results beat Wall Street forecasts. Futures for the
Nasdaq-100 index (NDU4) rose 17 points, or 0.4%, to 3,969.25.
Futures for the Dow Jones Industrial Average (DJU4) gained 47
points to 16,892, while those for the S&P 500 index (SPU4) rose
6.5 points to 1,969.50.
Economic news and data will drop in focus for investors on
Wednesday. First up will be ADP's employment report for July, which
comes ahead of Friday's bigger nonfarm payrolls data. Data from
ADP, the nation's biggest processor of company checks for
employees, comes at 8:15 a.m. Eastern Time.
At 8:30 a.m. Eastern, investors will get a first look at
second-quarter gross domestic product data, which is forecast to
expand 3.2%. That would mark a snapback from a shocking 2.9% plunge
in the first quarter, driven by extremely cold weather.
First-quarter growth figures will also be revised, and that initial
sharp drop could turn out to be smaller than expected.
"If the U.S. falls short of expectations here, it may suggest
that the impact of the first quarter slowdown has stretched beyond
the quarter itself and had an impact on the overall recovery," said
Craig Erlam, market analyst at Alpari UK, in a note. The only
silver lining to signs of a deeper slowdown are that it could delay
the first rate hike, expected as early as the first quarter of next
year, he said.
The Fed will release a policy decision at 2 p.m. Eastern Time.
Economists expect the central bank to reduce the monthly pace of
its bond purchases by another $10 billion to $25 billion, and
signal that it intends to end QE3 in October. Markets will be glued
to the Fed's statement, though, to see if there's any hint that the
first interest-rate hike from the Fed could come sooner than
expected or that rates could go up faster than anticipated.
U.S. stocks ended a choppy session lower on Tuesday after
tougher sanctions against Russia for its role in Ukraine's civil
war were announced. The S&P 500 (SPX) closed 9 points, or 0.5%,
lower at 1,969.95 on Tuesday, while the Dow Jones Industrial
Average (DJI) ended 70.48 points, or 0.4%, lower at 16,912 as
upbeat data were overshadowed by those sanctions.
The Russia MICEX index of blue-chips surged more than 2% on
Wednesday, which one analyst said was due to the fact that new
sanctions didn't affect the country's key gas sector. Some
strategists maintain, though, that Russia stocks remain a tricky
bet in wake of those sanctions.
Also read: Need to know: Ditch your 'portfolio patriotism' ahead
of dog days of August
Twitter rules
Shares of Twitter leapt 27% as analysts moved up price targets
in the wake of blowout results. "Stronger results amid a negative
sentiment should propel the stock higher," said Cantor Fitzgerald
analyst Youssef Squali in a note to investors. He lifted his price
target to $58 from $40. Read: Can Twitter convert the
'logged-out'?
Garmin (GRMN)sharply raised its forecast for the year, with the
GPS -devices maker citing strong first-quarter results as reason
for the improved outlook. Shares gained 6.9% ahead of the bell.
Humana(HUM) shares rose nearly 2% premarket. The health care
insurer's profit fell slightly short of expectations, but sales
beat forecasts. The company also confirmed its 2014 per-share
guidance.
Shares of Sprint (S) rose 1.9% ahead of the open after the
mobile-phone company swung to a profit in the second quarter, as
the pace of subscriber losses slowed. Twitter, AmEx, Yelp among
stocks to watch.
Amgen(AMGN) shares rose 3.8% in premarket after the company
posted a 23% rise in earnings, and announced a 15% cut in its
workforce as part of a restructuring program late Tuesday.
DreamWorks Animation SKG Inc. shares (DWA) could extend an 8%
late-session loss after the movie studio swung to a second-quarter
loss.
In other markets, crude-oil prices (CLU4) rose, gold (GCQ4)
edged higher, and the dollar index (DXY), which measures the
greenback against a basket of six currencies, traded mostly steady
ahead of GDP data and the Fed meeting.
European stocks traded mostly flat, outside of gains in Spain
after surprising economic growth data. In Asia, Hong Kong stocks
rose for a seventh straight session.
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