MADRID--Stock futures pushed higher on Wednesday as investors
kept an anxious but optimistic watch on the potential for a budget
deal out of Washington, D.C. A heavy earnings lineup is also
promising to keep the day busy.
Companies reporting ahead of the bell include Bank of America
Corp. (BAC), Bank of New York Mellon Corp. (BK), Abbott
Laboratories (ABT) and PepsiCo Inc. (PEP)
Building on gains throughout the Asia and Europe session,
futures for the Dow Jones Industrial Average rose 62 points, or
0.4%, to 15,157, while those for the S&P 500 index rose 7.8
points, or 0.5%, to 1,699.80. Futures for the Nasdaq 100 index
gained 6.75 points, or 0.2%, to 3,247.50.
Among the big names reporting early Wednesday, Bank of America
(BAC) is projected to report third-quarter profit of 19 cents a
share, according to analysts at J.P. Morgan.
PepsiCo is forecast to earn $1.17 a share in the third quarter,
according to analysts in a Thomson Reuters poll.
Shares of Yahoo! Inc. (YHOO) could be in focus after it earned
34 cents a share in the third quarter, slightly above the 33 cents
a share forecast by analysts. Shares of Yahoo rose 1.7% in after
hours on Tuesday.
Apple Inc. (AAPL) shares slipped in Frankfurt trading after a
report the company is reducing orders for its lower-cost iPhone 5C.
Citing persons familiar with the situation, The Wall Street Journal
reported Apple has notified two assemblers for the phone that it
will reduce orders for the fourth quarter. In addition, the Irish
government reportedly said it will close a tax loophole used by
Apple.
Though U.S. stock futures lifted, European stocks fell and Asia
was jittery as U.S. lawmakers raced against Thursday's deadline to
raise the debt ceiling and sort out a government shutdown that's in
its third week. Investors shook off a move by Fitch Ratings Service
to put the U.S.'s credit rating on negative watch.
In a statement Tuesday, Fitch said "prolonged negotiations over
raising the debt ceiling...risks undermining confidence in the role
of the U.S. dollar as the preeminent global reserve currency by
casting doubt over the full faith and credit of the U.S."
Senate leaders restarted talks on Tuesday evening to reopen the
government and raise the debt ceiling after House Republicans were
unable to push forward a vote on a proposal of their own. "Senator
Reid and [Minority Leader] Senator McConnell have re-engaged in
negotiations and are optimistic that an agreement is within reach,"
Adam Jentleson, spokesman for Senate Majority Leader Harry Reid,
said on Twitter.
Some analysts warned that lawmakers really didn't want to take a
chance on the reaction of markets if no deal is pushed through.
"Even though the consequences of a "no deal" today is not
technically a catastrophe, we expect a significant negative market
impact if politicians fail to get a deal through Congress before
midnight," said Signe Roed-Frederiksen, senior analyst at Danske
Bank, in a note. "Such an outcome will send a signal of a
completely dysfunctional U.S. political system, which should weigh
on both consumer and business sentiment, and increase general
financial market anxiety."
Even a short-term deal may not be enough to keep Wall Street
going, said others.
"Senate is set to reconvene at midday local time, but if we only
get a temporary solution--and by all accounts that's what we're
expecting to see happen--it's difficult to imagine just how markets
will find the confidence they need in such an outcome," said the
analyst team at Monex Capital Markets in a note.
Across other markets, gold prices were higher, but paring gains,
while oil pushed slightly higher and the dollar slipped lower.
Write to Barbara Kollmeyer at AskNewswires@dowjones.com
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