Stock futures increase after upbeat Fed outlook

[August 13, 2009]  NEW YORK (AP) -- Stock futures are sharply higher Thursday, a day after investors welcomed upbeat comments from the Federal Reserve.

With the Fed reinforcing beliefs that the economy is stabilizing, investors will look for further clues about the nation's recovery Thursday when the government releases data on jobless claims and retail sales.

Overseas, Asian markets rose after the Fed signaled the world's largest economy was improving, while European markets have been boosted by new data showing recessions have ended in Germany and France.

In the U.S., a new retail sales report is expected to show consumers boosted their spending in July, helped by the popular Cash for Clunkers auto sales program. Economists surveyed by Thomson Reuters expect retail sales increased 0.7 percent in July after a 0.6 percent increase in June.

Despite the overall increase in sales, economists expect growth will be a modest 0.1 percent excluding auto sales, which is less than the 0.3 percent growth in June.

Retail sales are considered a strong indicator of economic recovery because consumer spending accounts for more than two-thirds of all economic activity. It is widely believed spending needs to improve to help end the ongoing recession.

The report is due out at 8:30 a.m. EDT.

A weekly jobs report will also be closely watched Thursday morning. The Labor Department is expected to say the number of newly laid-off workers filing for unemployment benefits fell slightly last week to a seasonally adjusted 545,000, from 550,000.

The number of workers continuing to file jobless claims is also expected to decline slightly, to 6.3 million from 6.31 million.

The report is due out at 8:30 a.m. EDT.

Dow Jones industrial average futures rose 85, or 0.9 percent, to 9,404. Standard & Poor's 500 index futures rose 9.50, or 1 percent, to 1,011.70, while Nasdaq 100 index futures gained 13.50, or 0.8 percent, to 1,632.25.

After posting declines earlier in the week, major indexes rallied Wednesday as the Fed said at the end of its two-day meeting that the economy appears to be "leveling out" rather than shrinking at a slower rate. All the major indexes gained more than 1 percent.

Investors have been sending stocks consistently higher in recent weeks amid fresh signs of economic recovery.

Meanwhile, bond prices fell slightly. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.73 percent from 3.72 percent late Wednesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.18 percent from 0.17 percent late Wednesday.

The dollar fell against other major currencies, while gold prices rose.

Overseas, Japan's Nikkei stock average rose 0.8 percent. In afternoon trading, Britain's FTSE 100 gained 1 percent, Germany's DAX index rose 1.3 percent, and France's CAC-40 increased 1 percent.

[Associated Press; By STEPHEN BERNARD]

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