- Pre-Market Indications

Thursday, December 2, 2010

Indications: U.S. stock futures gain ahead of economic data

Stock Assault 2.0 - Artificial Intelligence Stock Market Software

By Polya Lesova, MarketWatch

LONDON (MarketWatch) â€" U.S. stock futures rose Thursday, extending gains from the previous session, as investors awaited housing and labor-market data, while the European Central Bank opted to keep interest rates on hold, as expected.

Futures on the Dow Jones Industrial Average /quotes/comstock/21b!f:dj\z10 (DJZ10 11,251, +18.00, +0.16%)  gained 45 points to 11,278, and S&P 500 index futures /quotes/comstock/21m!f:sp\z10 (SPZ10 1,207, +2.30, +0.19%)  rose 5.50 points to 1,210.

Nasdaq 100 futures /quotes/comstock/21m!f:nd\z10 (NDZ10 2,165, +6.25, +0.29%)  advanced 13.25 points to 2,171.70.

Is the rally in stocks overdone?

Wednesday’s big rally in stocks could be overdone, as the Dow erases all of its November losses.

The blue-chip Dow index /quotes/comstock/10w!i:dji/delayed (DJIA 11,256, +249.76, +2.27%)  rallied 2.3% Wednesday, posting its biggest percentage gain since Sept. 1, as robust economic data from China, Europe and the U.S. buoyed sentiment on Wall Street.

“It was a tremendous day for market speculation yesterday,” Deutsche Bank said in a note. “The net result was a short-covering frenzy for the [European Union] peripherals and a grab-a-thon for other risk assets.”

Thursday’s U.S. economic calendar includes data on weekly jobless claims, due at 8:30 a.m. Eastern time, and a report on pending-home sales for October at 10 a.m. Eastern.

On the corporate front, many U.S. retailers are reporting November same-store sales. Costco Wholesale Corp. /quotes/comstock/15*!cost/quotes/nls/cost (COST 68.31, +0.70, +1.04%)  posted a 9% increase in comparable sales for the four-week period ended Nov. 28.

Food retailer Kroger Co. /quotes/comstock/13*!kr/quotes/nls/kr (KR 23.86, +0.31, +1.32%)  is scheduled to report quarterly results.

In deal news, PepsiCo Inc. /quotes/comstock/13*!pep/quotes/nls/pep (PEP 65.63, +1.48, +2.31%)  said it will acquire 66% of Russia’s Wimm-Bill-Dann Foods /quotes/comstock/13*!wbd/quotes/nls/wbd (WBD 24.50, +0.89, +3.77%)  for $3.8 billion. PepsiCo added it will offer to buy the remaining shares of Wimm-Bill-Dann after completion of the first acquisition “at such time and on terms as are mandated by Russian law.”

The deal will raise PepsiCo’s annual global revenue from nutritious and functional foods to nearly $13 billion from about $10 billion today.

Shares of Wimm-Bill-Dann rallied 31% in thin premarket trading. Read more on PepsiCo’s deal.

On the downside, shares of Aeropostale Inc. /quotes/comstock/13*!aro/quotes/nls/aro (ARO 26.80, -0.23, -0.85%)  dropped 10% in premarket trading. The retailer’s third-quarter results missed market expectations.

Focus on Trichet’s news conference

On the other side of the Atlantic, the European Central Bank decided to keep its key rate on hold at 1%, as expected. Read about the ECB’s rate decision.

The focus now turns to the press conference of ECB President Jean-Claude Trichet, which is due to begin shortly. Investors are waiting to see whether the ECB will expand its bond-buying program in an effort to stem turmoil in the European bond markets, sparked by high debt levels in numerous countries including Ireland, Spain and Portugal.

Meanwhile, European stocks and the euro extended recent gains, as the Spanish government successfully completed a bond auction Thursday, though the yield rose sharply.

The euro gained 0.5% to $1.3178, and the Stoxx Europe 600 index /quotes/comstock/22c!sxxp (ST:STOXX600 268.42, +1.31, +0.49%)  advanced 0.6%. Spanish stocks once again outperformed, rising 1.8%.

In Asia, equities posted strong gains, with Japan's Nikkei Stock Average rising 1.8%. See Asia Markets.

In the commodity markets, oil futures were little changed at $86.77 a barrel in electronic trading on Globex.

Gold futures gained $3.50 to $1,390.80 an ounce.

Polya Lesova is chief of MarketWatch’s London bureau.

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