MarketWatch.com - Pre-Market Indications

Tuesday, December 21, 2010

Indications: U.S. stock futures up on Adobe gain, deal news

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By Barbara Kollmeyer, MarketWatch

MADRID (MarketWatch) â€" U.S. stock futures rose on Tuesday, lifted by premarket gains for Adobe Systems Inc. after upbeat earnings as well as deal news involving Martek Biosciences Corp. and Chrysler Financial.

Futures for the Dow Jones Industrial Average /quotes/comstock/21b!f:dj\h11 (DJH11 11,452, +48.00, +0.42%)  rose 34 points, or 0.3%, to 11,438, while those for the S&P 500 index /quotes/comstock/21m!f:sp\h11 (SPH11 1,246, +5.00, +0.40%)  added 4.5 points, or 0.4%, to 1,245.70.

Futures for the Nasdaq 100 index /quotes/comstock/21m!f:nd\h11 (NDH11 2,228, +7.75, +0.35%)  gained 6 points, or 0.3%, to 2,226.25.

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“We had some surprisingly good earnings from Adobe [and] from a corporate standpoint the market is looking a little bit higher,” said Peter Cardillo, chief market economist at Avalon Partners.

Shares of Adobe /quotes/comstock/15*!adbe/quotes/nls/adbe (ADBE 29.18, +0.39, +1.35%)  rallied 6.8% in premarket trade after the firm posted late Monday fiscal fourth-quarter results that beat Wall Street’s targets, helped by strong demand for software products.

Deal news also inspired market gains. Shares of Martek Biosciences /quotes/comstock/15*!matk (MATK 23.36, +0.34, +1.48%) soared 34% in premarket trade on news the company has agreed to a $31.50 a share bid, or $1.09 billion, from Dutch-based life sciences and materials-science group Royal DSM NV.

And Canada’s TD Bank Group /quotes/comstock/13*!td/quotes/nls/td (TD 69.51, -1.71, -2.40%)  said it will buy Chrysler Financial from private-equity group Cerberus for $6.3 billion in cash.

Jabil Circuit Inc. /quotes/comstock/13*!jbl/quotes/nls/jbl (JBL 17.66, +0.19, +1.09%)  could also be on the move after the company beat forecasts for earnings per share on an adjusted basis.

After the market close, investors will look to quarterly reports from Nike Inc. /quotes/comstock/13*!nke/quotes/nls/nke (NKE 90.27, +0.22, +0.24%)  and Red Hat Inc /quotes/comstock/13*!rht/quotes/nls/rht (RHT 47.92, +0.09, +0.19%) .

Cardillo said investors were clearly not spooked by a warning from Moody’s Investors Service that it could downgrade Portugal’s debt rating by a notch or two. That news was also taken in stride by European markets, which started out positive and were continuing in that vein in early afternoon trading. See story on Portugal.

China’s Vice Premier Wang Qishan said China is ready to lend a hand over Europe’s sovereign-debt worries. The news from China boosted the euro against the dollar, but analysts at FxPro said that was more to do with thin volumes than anything else.

“China matters, not least because it holds nearly 30% of global forex reserves and, while we do not know the proportion held in euros, we do know it wants to increase it over time and also that it has been a buyer of peripheral euro-zone debt in the past,” they said in a note.

Asia markets also gained, helping to underpin Wall Street’s open, as Korean tensions dissipated.

“I think it’s just momentum in the market,” said Cardillo. “We should expect seasonally light volumes, but we’re headed for a strong finish to the end for the year,” and he expects that will continue into 2011.

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The Dow Jones Industrial Average fell on Monday as worries over proposed credit-card rules knocked shares of American Express Co. /quotes/comstock/13*!axp/quotes/nls/axp (AXP 42.50, -1.51, -3.43%)  .

The Dow slipped 13.78 points, or 0.1%, to 11,478.13, while the S&P 500 index /quotes/comstock/21z!i1:in\x (SPX 1,247, +3.17, +0.25%)  and the Nasdaq Composite index /quotes/comstock/10y!i:comp (COMP 2,650, +6.59, +0.25%)  finished higher.

Among commodities, February crude futures rose 2 cents to $89.39 a barrel, while gold futures gained 80 cents to $1,386.90 an ounce.

Barbara Kollmeyer is an editor for MarketWatch in Madrid.

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