US stocks look to extend prior day's big gains

[July 24, 2009]  NEW YORK (AP) -- The momentum in the stock market is growing with U.S. stock futures pointing to a higher opening Friday following gains in overseas markets.

Asian markets rose overnight, and the rally extended into trading in Europe early Friday as markets around the world cheered Wall Street's stunning advance on Thursday, in which the Dow Jones industrials jumped almost 190 points to their first close above the 9,000 mark since January.

Wall Street's best-known indicator now stands at its highest level since November.

Investors rallied around news that existing home sales rose in June for the third straight month and by more than economists had expected. More solid earnings reports and forecasts from companies, including Ford Motor Co., added to the market's optimism.

Investors seem to be looking past disappointing reports, like the one from tech giant Microsoft Corp., which said after the market closed Thursday that its revenue fell short of analysts' expectations.

In just nine days, both the Dow and the Standard & Poor's 500 index have climbed 11 percent as companies' better-than-expected earnings reports confirm for investors that the economy is indeed improving and that a turnaround is possible by the end of this year.

Such hopes had carried the market up as much as 40 percent this spring, but that rally fizzled last month as still growing unemployment and weak consumer confidence fed doubts about the economy's recovery.

Despite the market's impressive performance over the past two weeks, analysts warn there are many obstacles that could threaten the advance. Many retailers have yet to report their quarterly results, and unemployment, which affects so many facets of the economy, is projected to reach 10 percent this year.

Just a handful of earnings reports are expected Friday from big-name companies and no major economic reports are scheduled.

Ahead of the market's open, Dow Jones industrial average futures rose 28, or 0.3 percent, to 9,019. Standard & Poor's 500 index futures are up 2.80, or 0.3 percent, to 971.70, while Nasdaq 100 index futures gained 2, or 0.1 percent, to 1,586.

Bond prices fell further in early trading amid the increased risk appetite. The yield on the benchmark 10-year Treasury note, which moves opposite its price, inched up to 3.68 percent from 3.67 percent late Thursday.

Among the day's earnings news, Schlumberger Ltd., the world's largest oilfield services company, said its second-quarter earnings dropped 57 percent as oil and natural gas companies scaled back their exploration and drilling activities. But excluding one-time items, the company beat Wall Street's expectations.

The dollar was mixed against other major currencies, while gold prices hovered around $950 an ounce.

Oil prices climbed higher in premarket trading on the New York Mercantile Exchange, adding 18 cents to $67.34 a barrel.

Overseas, Japan's Nikkei stock average jumped 1.6 percent, while Hong Kong's Hang Seng index gained 0.8 percent. The Hang Seng stands at its highest level in 10 months. In late morning trading in Europe, Britain's FTSE 100 rose 0.6 percent, Germany's DAX index was up 0.5 percent, and France's CAC-40 added 0.5 percent.

[Associated Press; By SARA LEPRO]

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