Stock futures rise, point to higher opening

[July 23, 2010]  NEW YORK (AP) -- Stocks were set to extend gains Friday after more upbeat earnings lifted expectations that the economy is steadily improving.

Big moves were being held somewhat in check as investors worldwide await results from European bank stress tests. The tests could remove some uncertainty about how mounting government debt in many European countries could affect the financial sector. Debt problems have dragged down markets worldwide in recent months because there are worries high debt could slow a global economic recovery.

European markets were mixed ahead of the test results, which will come out after markets there close for the weekend. German shares soared, however, after a closely watched business climate index rose unexpectedly for the fifth straight month.

Microsoft Corp. and American Express Co. both reported earnings after the market closed Thursday that topped forecasts. Their results showed that businesses and consumers are increasing their spending as the economy recovers.

American Express said customers are spending close to pre-recession levels, a sign that shoppers are gaining some confidence in their personal finances.

Their earnings added to a string of results over the past couple of days that helped push the Dow Jones industrial average up more than 200 points Thursday. Investors have become more confident, for the moment, that upbeat profit and outlooks from companies are a better gauge of future growth than the disappointing economic reports that have regularly been released in recent months.

Amazon.com Inc. was the lone disappointment among the group reporting after the market closed. Its profit missed forecasts, but its sales and revenue picked up more than expected. A sharp rise in costs led to the missed forecast.

McDonald's Corp., Ford Motor Co. and Verizon Communications Inc. all report earnings Friday, which could provide more confidence to investors.

Ahead of the opening bell, Dow Jones industrial average futures rose 29, or 0.3 percent, to 10,296. Standard & Poor's 500 index futures rose 3.90, or 0.4 percent, to 1,091.60, while Nasdaq 100 index futures rose 6.40, or 0.3 percent, to 1,858.75.

Microsoft shares rose 10 cents to $25.94 in pre-opening trading. Amazon dropped $13.00, or 10.8 percent, to $107.07.

Stocks surged Thursday after a handful of strong results and forecasts were released before the market opened. Caterpillar Inc., 3M Co., UPS Inc. and AT&T Inc. all topped earnings forecasts and raised their outlooks for future profit.

Meanwhile, bond prices fell Friday as investors continued to favor stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.98 percent from 2.94 percent late Thursday.

Overseas, Britain's FTSE 100 dipped 0.3 percent, Germany's DAX index rose 2.9 percent, and France's CAC-40 rose 0.4 percent. Japan's Nikkei stock average jumped 2.3 percent.

[Associated Press; By STEPHEN BERNARD]

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