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Wednesday, May 12, 2010

Indications: U.S. stock futures edge up as gold jumps

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By Steve Goldstein, MarketWatch

LONDON (MarketWatch) -- U.S. stock futures edged higher Wednesday as traders flocked to gold amid uncertainty over how governments will combat staggering debt levels.

S&P 500 futures rose 5.6 points to 1,157.80 and Nasdaq 100 futures gained 8.75 points to 1,944.00. Futures on the Dow Jones Industrial Average rose 38 points.

TODAY'S INTERNATIONAL MARKET STORIES

Global Dow

• MarketWatch Topics: Greece • Asia Markets | Europe Markets | LatAm Markets • Canadian Markets | Israel Stocks | London • U.S.: Market Snapshot | After Hours

Tools• Latin American/Canadian indexes • European indexes | Asian indexes

More on the Markets • Bond Report | Oil News | Earnings Watch • Currencies | U.S. Economic Calendar

Highlights • Euro-zone GDP grows; momentum questioned • EU package success only if wages cut • Spain outlines 5% wage cut to slash deficit • Bank of England chief backs quick budget cuts • Cameron assembles U.K. coalition government • Developed markets becoming more emergin • ING, Aegon swing to profit as write-downs fall • Deutsche Telekom back to profit, U.S. unit lags

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U.S. stocks ended lower in one of the calmer sessions in several days, with the Dow Jones Industrial Average retreating 36 points and the S&P 500 and Nasdaq Composite also making modest losses. Doubts over the nearly $1 trillion European Union aid package announced over the weekend as well as accelerating Chinese inflation contributed to the down day on Wall Street.

Reflecting the uncertainty, gold futures traded at record high levels, surging $17.70 an ounce to $1,238. See gold futures story.

Speaking at a press conference following a quarterly inflation report, Bank of England Governor Mervyn King said Wednesday the financial crisis is far from over and that governments across the globe needed to tackle excessive budget deficits. See Bank of England story.

The euro /quotes/comstock/21o!x:seurusd (CUR_EURUSD 1.2668, +0.0036, +0.2850%) gained ground to recapture the $1.27 level as Spain outlined steeper budget cuts and German GDP in the first quarter was stronger than forecast. See euro-zone GDP story.

Oil futures were up 25 cents a barrel ahead of weekly energy-inventory data.

The U.S. is selling $24 billion in 10-year notes and trade deficit data are due at 8:30 a.m. Eastern time.

Walt Disney /quotes/comstock/13*!dis/quotes/nls/dis (DIS 35.76, +0.47, +1.33%) dropped 3% after the entertainment giant and component of the Dow Jones Industrial Average said its quarterly profit climbed 55% on the success of "Alice in Wonderland" and merchandise sales from "Toy Story 3." Analysts on a conference call expressed concerns over the company's parks and resorts division. See Disney story.

Morgan Stanley /quotes/comstock/13*!ms/quotes/nls/ms (MS 28.38, -0.48, -1.66%) fell 3% after the Wall Street Journal reported it was under investigation for collateralized debt obligations it underwrote that its trading desk bet against in a case with parallels to the Goldman Sachs probe.

Networking giant Cisco /quotes/comstock/15*!csco/quotes/nls/csco (CSCO 25.96, -0.17, -0.65%) rose 0.7% ahead of its quarterly results, due after the close.

The British pound /quotes/comstock/21o!x:sgbpusd (CUR_GBPUSD 1.4889, -0.0038, -0.2546%) was stable as the Tories were able to form a government with the Liberal Democrats. The new coalition government is planning a budget to cut out 6 billion pounds ($9 billion) in spending.

U.K. banks however lagged their European counterparts on concerns over the role of Vince Cable, a Liberal Democrat, in their regulation. Royal Bank of Scotland /quotes/comstock/13*!rbs/quotes/nls/rbs (RBS 14.78, -0.50, -3.27%) shares fell over 2%.

Major Asian markets were mixed and the Bank of Korea kept interest rates unchanged.

Steve Goldstein is MarketWatch's London bureau chief.


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