Indications: U.S. futures advance amid mixed earnings, data

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By Steve Goldstein, MarketWatch

LONDON (MarketWatch) -- U.S. stock futures advanced Tuesday as traders eyed mixed reports from two top retailers and two economic releases, showing improving profits at Wal-Mart Stores and Home Depot but also signs of slowing growth.

Off the highest levels of the morning, S&P 500 futures rose 6.6 points to 1,141.10 and Nasdaq 100 futures rose 9.25 points to 1,922.70.

Futures on the Dow Jones Industrial Average rose 48 points.

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Data released at 8:30 a.m. showed U.S. housing starts increased for the second straight month in April to an 18-month high, but also showed building permits fell sharply, casting doubts on the momentum of the housing recovery.

Housing starts rose an estimated 5.8% in April to a seasonally adjusted annual rate of 672,000 from an upwardly revised 635,000 in March, the Commerce Department reported Tuesday. However, building permits fell 11.5% to a seasonally adjusted annual rate of 606,000, the lowest in six months.

U.S. wholesale prices fell a seasonally adjusted 0.1% in April, as the cost of energy and food eased, government data showed. The core intermediate PPI, which is viewed as a leading indicator of inflation, jumped 1.1%, the largest one-month gain since July 2008.

Overseas, U.K. CPI ran a faster-than-forecast 3.7% in April, while euro-zone inflation rose 1.5%.

Core CPI was 0.8% in the 16-nation euro bloc, according to the data released Tuesday. Last week's data showing core inflation turned negative in Spain rattled the market.

Traders also eyed results from the world's top retailer, Wal-Mart Stores /quotes/comstock/13*!wmt/quotes/nls/wmt (WMT 52.73, +0.61, +1.17%) , which rose 1% in premarket trade as it reported a stronger-than-forecast profit but offered cautious second-quarter guidance.

Walmart U.S. same-store sales fell 1.4%, and sales by that measure are seen dropping 2% to rising 1% in the second quarter.

Home Depot /quotes/comstock/13*!hd/quotes/nls/hd (HD 35.59, +0.39, +1.11%) , the world's top home-improvement retailer, edged higher after upping its outlook and reporting a 41% profit rise.

Boeing /quotes/comstock/13*!ba/quotes/nls/ba (BA 69.68, -0.14, -0.20%) rose over 1% as it late Monday said it would increase the rate at which it builds 737 jets. Jefferies & Co. lifted its Boeing 2012 earnings per share estimate to $6 from $5.75.

Google /quotes/comstock/15*!goog/quotes/nls/goog (GOOG 507.97, +0.44, +0.09%) said it's buying a Norwegian IP services firm, Global IP Solutions, for $68 million. Google rose marginally.

Led by banks, the Stoxx Europe 600 rose 1.4% in early afternoon trade. The Shanghai Composite bounced back after Monday's hammering, rising 2%.

The euro rose above $1.24 while gold futures fell sharply, dropping $18.90 to $1,209.20 an ounce.

U.S. stocks on Monday ended with muted gains, masking big intraday turmoil -- the S&P 500 fell as much as 1.8% during the session before closing with a 0.1% rise.

"Whether it lasts or not, it definitely feels that systemic risk has been reduced since the actions of two weekends ago, but that the market has perhaps woken up to the slower growth world we are likely going to be living in post the extended crisis," said Jim Reid, a strategist at Deutsche Bank, referring to the 750 billion euro aid package from the European Union and the International Monetary Fund.

Steve Goldstein is MarketWatch's London bureau chief.