- Pre-Market Indications

Friday, July 23, 2010

Indications: Futures gain ahead of Honeywell, Ford results

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By Polya Lesova, MarketWatch

FRANKFURT (MarketWatch) -- U.S. stock futures posted modest gains on Friday, buoyed by strong economic data from Germany and the U.K., as investors awaited earnings results from Honeywell and Ford as well as the results from the European bank-stress tests.

S&P 500 futures gained 3.80 points to 1,091.50 and Nasdaq 100 futures rose 7 points to 1,859.70. Futures on the Dow Jones Industrial Average advanced 27 points to 10,294.

The Dow /quotes/comstock/10w!i:dji/delayed (DJIA 10,322, +201.77, +1.99%) rallied 201.77 points, or 2%, on Thursday, posting its biggest point and percentage gain in over two weeks.

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Traders received positive economic news from Europe for a second day. The German Ifo index posted an unexpectedly large jump in July, confirming the strong recovery in Europe's biggest economy.

The business-climate index rose to 106.2 in July from a reading of 101.8 in June, the Munich-based Ifo Institute reported. Read more on the Ifo data.

Also boosting sentiment, Britain's gross domestic product grew by a much stronger-than-expected 1.1% in the second quarter, government data showed. Economists had forecast a quarterly rise of 0.6%.

The British pound rose 1% to $1.5415 following the data and the euro /quotes/comstock/21o!x:seurusd (CUR_EURUSD 1.2937, +0.0053, +0.4114%) gained 0.3% to $1.2938.

No major U.S. economic data are scheduled for release on Friday.

Before the market opens, Ford Motor Co. /quotes/comstock/13*!f/quotes/nls/f (F 12.09, +0.54, +4.68%) , Honeywell International Inc. /quotes/comstock/13*!hon/quotes/nls/hon (HON 42.66, +1.53, +3.72%) , McDonald's Corp. /quotes/comstock/13*!mcd/quotes/nls/mcd (MCD 71.40, +1.29, +1.84%) and Verizon Communications Inc. /quotes/comstock/13*!vz/quotes/nls/vz (VZ 27.00, +0.48, +1.81%) are scheduled to report quarterly earnings.

Eyes on European stress tests

The Stoxx Europe 600 index /quotes/comstock/22c!sxxp (ST:SXXP 255.08, +0.71, +0.28%) edged up 0.2% in midday trading, as investors awaited the results from the European bank-stress tests, which will be released starting at noon Eastern time.

"Overall, the transparency bar has been lowered and markets will now more likely gloss over vague details about how the stress tests were constructed," Deutsche Bank strategists wrote in a note to clients. "So our best guess is that these results kick the can further down the road without fully putting the matter to bed."

Shares of Germany's Deutsche Bank /quotes/comstock/13*!db/quotes/nls/db (DB 64.27, +3.85, +6.37%) edged up 0.2%, while France's BNP Paribas /quotes/comstock/24s!e:bnp (FR:BNP 49.82, -0.04, -0.07%) fell 0.6% and Credit Agricole /quotes/comstock/24s!e:aca (FR:ACA 9.39, -0.07, -0.71%) dropped 0.7%.

Spanish banking giant Santander /quotes/comstock/06x!csan (ES:SAN 10.00, +0.01, +0.14%) /quotes/comstock/13*!std/quotes/nls/std (STD 12.96, +0.84, +6.93%) gained 1%.

Shares of Vodafone Group gained 0.8% in London after the company reported a 5% improvement in quarterly sales and announced it will pay 1.25 billion pounds ($1.9 billion) to settle outstanding tax issues in the U.K. See more on Vodafone.

Rex on Techs: Yahoo tests investors' patience

In Sweden, shares of Ericsson AB /quotes/comstock/15*!eric/quotes/nls/eric (ERIC 12.14, +0.53, +4.57%) tumbled 5.6% after its second-quarter net profit fell short of market expectations and sales declined 8% because of supply issues and component shortages. Read more on Ericsson.

Shares of oil giant BP PLC /quotes/comstock/13*!bp/quotes/nls/bp (BP 36.23, +0.10, +0.28%) /quotes/comstock/23s!a:bp. (UK:BP. 400.70, +0.70, +0.18%) fell 0.7%. Tropical Storm Bonnie, which is projected to track into the Gulf of Mexico, has forced the firm to temporarily suspend its relief-well activities in the region. See more on BP.

In the commodity markets, September crude-oil futures fell 23 cents to $79.07 a barrel in electronic trading on the New York Mercantile Exchange.

Gold futures posted small gains to trade at $1,198.30 an ounce.

Polya Lesova is a reporter for MarketWatch, based in Frankfurt.

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