MarketWatch.com - Pre-Market Indications

Wednesday, September 8, 2010

Indications: Stock futures gain after Portuguese auction

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By Polya Lesova, MarketWatch

FRANKFURT (MarketWatch) -- U.S. stock futures rose on Wednesday, as Portugal successfully conducted a bond auction, easing short-term concerns about euro-zone sovereign debt.

Futures on the Dow Jones Industrial Average gained 22 points to 10,360 after earlier trading down 25 points.

"Given that the markets are focused so much on fear at the moment, every bit of good news produces a small comeback in risk," said Mads Koefoed, market strategist at Saxo Bank. "When Portuguese bonds are sold, then it's [the market] simply rallying on everything that can be interpreted as good news."

The Portuguese government sold 661 million euros ($839 million) of three-year debt and 378 million euros of 10-year bonds. Demand was solid and boosted market sentiment.

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S&P 500 futures gained 3 points to 1,094.20 and Nasdaq 100 futures rose 6.75 points to 1,864.20.

European stock markets also turned higher, erasing losses, with the Stoxx Europe 600 index /quotes/comstock/22c!sxxp (ST:SXXP 261.70, +1.94, +0.75%) rising 0.7% in intraday trade.

The Portuguese auction offset weaker-than-expected German economic data.

Germany's exports dropped in July from the previous month, while industrial production edged up only 0.1%, much less than economists expected. See more on Germany.

The blue-chip Dow index /quotes/comstock/10w!i:dji/delayed (DJIA 10,341, -107.24, -1.03%) dropped 1% on Tuesday, snapping a four-session winning streak.

The Federal Reserve will release its Beige Book at 2 p.m. Eastern Time. Consumer credit for July and a speech by Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis, are also on the calendar.

The Bank of Canada is expected to announce its decision on interest rates.

BP report on the spill

In the energy sector, shares of BP PLC /quotes/comstock/13*!bp/quotes/nls/bp (BP 37.19, -0.24, -0.64%) /quotes/comstock/23s!a:bp. (UK:BP. 415.25, +8.45, +2.08%) rallied 3.2% in premarket trading. In its internal report released on Wednesday, the firm said that "a sequence of failures involving a number of different parties" led to the explosion and fire that killed 11 people and caused an environmental disaster in the Gulf of Mexico earlier this year.

"It is evident that a series of complex events, rather than a single mistake or failure, led to the tragedy," said BP's outgoing chief executive, Tony Hayward. "Multiple parties, including BP, Halliburton and Transocean, were involved."

Shares of Halliburton Co. /quotes/comstock/13*!hal/quotes/nls/hal (HAL 29.84, -0.59, -1.94%) and Transocean Ltd. /quotes/comstock/13*!rig/quotes/nls/rig (RIG 53.05, -1.28, -2.36%) were little changed in premarket trading.

Shares of Talbots Inc. /quotes/comstock/13*!tlb/quotes/nls/tlb (TLB 11.11, -0.38, -3.31%) dropped 10% in premarket trade after the firm reported quarterly results that disappointed investors.

Most Asian stock markets ended lower on Wednesday, with Japan's Nikkei Stock Average index dropping 2.2%.

U.K. mobile telecoms giant Vodafone Group PLC /quotes/comstock/23s!a:vod (UK:VOD 159.45, -0.45, -0.28%) said it's selling its entire 3.2% stake in China Mobile Ltd. /quotes/comstock/13*!chl/quotes/nls/chl (CHL 50.25, -1.17, -2.27%) in a deal that will generate 4.3 billion pounds ($6.6 billion) before taxes and costs. Read more on Vodafone.

The British pound /quotes/comstock/21o!x:sgbpusd (GBPUSD 1.5439, +0.0082, +0.5340%) gained 0.7% to $1.5446, buoyed by a report showing U.K. housing prices unexpectedly rose in August.

The dollar index /quotes/comstock/11j!i:dxy0 (DXY 82.84, +0.02, +0.02%) , which tracks the performance of the greenback against a basket of other major currencies, was little changed at 82.797.

In the commodity markets, gold for December delivery touched an intraday high of $1,262.30 an ounce in electronic trading on Globex. Gold futures surged to a new settlement high on Tuesday, fueled by safe-haven demand.

Crude-oil futures dropped 17 cents to $73.92 a barrel in electronic trading on Globex. The American Petroleum Institute will report data on oil supplies this afternoon, a day later than usual because of Labor Day. Analysts polled by Platts expect declines in oil and gasoline stockpiles.

Polya Lesova is MarketWatch's London bureau chief.

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