MarketWatch.com - Pre-Market Indications

Tuesday, January 4, 2011

Indications: U.S. stock futures gain before Fed minutes

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By Kate Gibson and Barbara Kollmeyer, MarketWatch

NEW YORK (MarketWatch) â€" U.S. stock futures pointed to a firmer open Tuesday for Wall Street, adding to the prior day’s surge, with investors waiting for economic data as well as the minutes from the most recent Federal Open Market Committee meeting.

Futures for the Dow Jones Industrial Average /quotes/comstock/21b!f:dj\h11 (DJH11 11,615, +30.00, +0.26%)  rose 31 points to 11,616, while those for the S&P 500 index /quotes/comstock/21m!f:sp\h11 (SPH11 1,268, +2.20, +0.17%)  advanced 2.40 points to 1,271.87.

Futures for the Nasdaq 100 index /quotes/comstock/21m!f:nd\h11 (NDH11 2,256, +5.75, +0.26%)  also gained, up 6.5 points to 2,222.92.

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Before the bell, the backdrop was mostly upbeat, with European and Asian stocks higher, although insurers in Australia were hit by heavy flooding in Queensland.

Data on U.S. factory orders for November are due out at 10 a.m. Eastern, followed by figures on auto sales for December, which could put shares of General Motors Co. /quotes/comstock/13*!gm/quotes/nls/gm (GM 37.06, +0.20, +0.54%)  and Ford Motor Co. /quotes/comstock/13*!f/quotes/nls/f (F 17.25, +0.46, +2.74%)  in focus.

At 2 p.m. Eastern time, minutes of the Federal Open Market Committee’s Dec. 14 meeting are slated for release.

U.S. futures are “pointing to an uneasy atmosphere as the Fed releases minutes from December’s FOMC meeting, threatening to chip away at the recent optimism about U.S. economic growth with another overtly dovish offering,” said Ilya Spivak, currency strategist at Daily FX.

What's the outlook for stocks?

MarketWatch's Dave Callaway and Barron's Mike Santoli join Simon Constable for a discussion on the outlook for stocks in 2011, including whether the January Effect will hold true this year.

“The statement following the meeting itself failed to acknowledge improving economic data flow [late in the fourth quarter], and traders are understandably curious to see what has [Fed Chairman] Ben Bernanke and company on edge,” said Spivak.

U.S. stocks rallied to two-year highs Monday as economic reports on manufacturing and construction spurred optimism. The Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 11,671, +93.24, +0.81%)  gained 93.24 points, or 0.8%, to 11,670.75, its highest close since August 2008.

In premarket trade, U.S.-listed shares of BP PLC /quotes/comstock/13*!bp/quotes/nls/bp (BP 45.15, +0.98, +2.22%)   /quotes/comstock/23s!a:bp. (UK:BP. 491.65, +26.10, +5.61%)  gained 2.3%.

The Daily Mail reported that Royal Dutch Shell /quotes/comstock/23s!e:rdsa (UK:RDSA 2,168, +29.00, +1.36%)   /quotes/comstock/13*!rds.a/quotes/nls/rds.a (RDS.A 67.08, +0.30, +0.45%)  mulled a takeover of BP during its oil-spill crisis in the Gulf of Mexico last year. Ultimately, Shell’s board decided there were too many legal liabilities to take on BP, but the company is still interested in a merger, the newspaper said.

Borders Group Inc. /quotes/comstock/13*!bgp/quotes/nls/bgp (BGP 0.96, +0.06, +6.64%)  shares could also be in play after dropping more than 8% in late trading Monday.

The book retailer said its counsel and chief information officer resigned. On Tuesday, a unit of closely held Ingram Industries said it would continue to supply books to Borders despite the chain’s difficult financial situation, The Wall Street Journal reported.

Across the Atlantic, the FTSE 100 /quotes/comstock/23i!i:ukx (UK:UKX 6,031, +131.02, +2.22%)  rallied 2.5% in intraday action as trading resumed in London after a long holiday weekend. European stocks also moved higher, but the gains were not as dramatic as Monday’s.

In currencies, the euro rose 0.5% to $1.3403, and in commodities, gold for February delivery fell $14.70 to $1,408.20 an ounce, while crude-oil futures rose 29 cents to $91.84 a barrel.

Kate Gibson is a reporter for MarketWatch, based in New York. Barbara Kollmeyer is an editor for MarketWatch in Madrid.

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