Stock futures rise after sell-off as dollar falls

[December 09, 2009]  NEW YORK (AP) -- Stock futures are indicating a higher open on Wall Street Wednesday, bouncing back from the previous day's losses as the dollar resumes its decline.

An upbeat profit and sales forecast from chipmaker Texas Instruments Inc. is also helping to boost futures. The technology giant said late Tuesday that it is seeing an increase in demand for chips used in cell phones and other electronics.

The gains in U.S. stock futures follow a sharp sell-off in shares on Tuesday that carried over into Asia overnight as concerns about foreign debt loads escalated. Moody's Investor Service, a major rating agency, has warned that the U.S. and Britain are at risk of having their ratings downgraded if they don't get their finances under control, while Fitch downgraded its rating on Greece. Shares in Europe were slightly weaker in late morning trading there.

Investors have been waffling between stocks and safe harbors like the dollar in recent weeks as they try to determine the strength of the economic recovery and where they will be able to make the biggest returns.

While investors want to see the economy grow, they also know that the Federal Reserve could raise interest rates and remove its stimulus measures once the economy appears to be on solid footing. Higher rates could upset the stock market's nine-month advance. Investors have taken advantage of cheap financing this year to invest in riskier assets like stocks and commodities that have the potential to earn better returns than cash.

On Tuesday, concerns about spiraling debt loads and disappointing corporate reports drove investors to buy the dollar and Treasurys and sell stocks. The Dow Jones industrial average fell 104 points.

Ahead of the market's open, Dow Jones industrial average futures rose 39, or 0.4 percent, to 10,310. Standard & Poor's 500 index futures gained 5.30, or 0.5 percent, to 1,095.30, while Nasdaq 100 index futures rose 6.50, or 0.4 percent, to 1,775.

Later Wednesday morning, the Commerce Department will release data on wholesale trade inventories for October.

Analysts expect businesses reduced wholesale inventories for a record 14th consecutive month in October, but are looking for sales to grow. Rising sales will eventually encourage businesses to restock shelves and boost production, which would help boost the broader economy.

Better earnings and revenue guidance from Texas Instruments helped offset some of the disappointing corporate reports from 3M Co. and McDonald's Corp. The chipmaker raised its fourth-quarter outlook, citing improving demand.

In other trading, bond prices retreated. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.41 percent from 3.39 percent late Tuesday.

The ICE Futures US dollar index, which tracks the dollar against other major currencies, fell 0.4 percent.

Commodities prices rose as the weaker dollar made them more attractive to foreign buyers. Silver and copper prices rose, while gold hovered at $1,143 an ounce. Oil prices jumped $1.03 to $73.65 a barrel in electronic premarket trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average fell 1.3 percent and Hong Kong's Hang Seng index fell 1.4 percent. In late morning trading, Britain's FTSE 100 inched up 0.1 percent, Germany's DAX index was down 0.2 percent, and France's CAC-40 slipped 0.2 percent.

[Associated Press; By SARA LEPRO]

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