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 11.25 points, or 0.2%, to 3,960.75.
The earnings list for Wednesday includes Phillips 66 and Sprint,
while Amgen could get a premarket boost on the heels of
results.
Futures for the Dow Jones Industrial Average (DJU4) gained 30
points to 16,875, while those for the S&P 500 index (SPU4) rose
3.9 points to 1,966.90.
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.
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.
"Sentiment still seems weak following news of fresh sanctions
against Russia, so a weaker ADP or GDP number could see the selling
of yesterday turn into something more serious," said Chris
Beauchamp, market analyst at IG, in a note. 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 blue-chips Russia MICEX index 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.
Twitter rules
Shares of Twitter rose 26% in heavy premarket volume, 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'?
Phillips 66 (PSX) and Sprint (S) are due to report results ahead
of the opening bell. Twitter, AmEx, Yelp among stocks to watch
Amgen(AMGN) could get a premarket lift after the company posted
a 23% rise in earnings, and announced a 15% cut in its workforce as
part of a restructuring program.
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, while gold
(GCQ4) traded flat, 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.
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