Stock futures higher ahead of key earnings reports

[July 14, 2009]  NEW YORK (AP) -- Stock futures were modestly higher Tuesday as investors await key earnings reports from the financial, technology and health care sectors for signs on whether the economy is beginning its recovery or just not getting any worse.

Investors will also weigh government reports on monthly retail sales and inflation which are due out before the market opens.

Overseas markets rose Tuesday amid optimism about improvements in the banking sector and hopes for an economic recovery.

U.S. markets rallied Monday after a respected banking analyst upgraded her view on Goldman Sachs Group Inc. Meredith Whitney's upbeat view on the New York banking giant pulled the entire financial sector higher and financials pushed an overall gain in the broader market.

Investors will have a chance to see if her optimism was well-founded as Goldman -- long considered one of the strongest banks amid the recession -- is scheduled to release its second-quarter results Tuesday morning before the market opens.

Goldman kicks off a string of high-profile bank earnings reports for the week. JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. are all expected to report second-quarter results later in the week.

Investors will be looking at earnings for signs that the banking sector has stabilized after last fall's near collapse. In a sign that the sector has not fully recovered, CIT Group Inc., a lender to small and mid-sized business, is talking with the government about receiving emergency assistance to help solve liquidity problems.

Ahead of the opening bell, Dow Jones industrial average futures rose 20, or 0.2 percent, to 8,279. Standard & Poor's 500 index futures rose 2.00, or 0.2 percent, to 897.60, while Nasdaq 100 index futures gained 2.75, or 0.2 percent, to 1,445.25.

Aside from Goldman, investors will also get quarterly results Tuesday from chipmaker Intel Corp., health care firm Johnson & Johnson and fast-food restaurant operator Yum Brands Inc.

Investors will also get two key economic reports Tuesday that should provide a glimpse of the health of the economy.

June retail sales data, which is due out at 8:30 a.m. EDT, will be closely watched for signs that consumers are ramping up purchases. Economists surveyed by Thomson Reuters expect retail sales increased 0.4 percent in June, compared with a 0.5 percent gain in May. Two consecutive months of growth would indicate the economy might be stabilizing.

Growing retail sales are considered a key to economic recovery as consumer spending accounts for more than two-thirds of economic activity.

The Labor Department will release its monthly reading on wholesale prices. The Producer Price Index, which is a measure of inflation, likely rose 0.9 percent in June because of the rising cost of energy products. The report is due out at 8:30 a.m. EDT.

Investors will try to sustain positive momentum Tuesday after a month of mixed trading. The Dow jumped 2.3 percent Monday in relatively thin trading volume. It was the best performance for the blue chips since June 1, and all 30 components of the index rose on the same day for the first time since late March.

Meanwhile, bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.38 percent from 3.35 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.18 percent from 0.16 percent late Monday.

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

Oil prices rose amid signs Asia might be emerging from its economic slump and demand would again rise. Oil rose 74 cents to $60.43 a barrel in premarket electronic trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average gained 2.3 percent. In afternoon trading, Britain's FTSE 100 rose 0.6 percent, Germany's DAX index rose 0.9 percent, and France's CAC-40 gained 0.6 percent.

[Associated Press; By STEPHEN BERNARD]

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