Stock futures inch higher before confidence report

[September 28, 2010]  NEW YORK (AP) -- Stock futures inched higher Tuesday as traders were cautiously optimistic about some improving economic reports overseas and corporate deal-making continued.

The Asian Development Bank raised its forecast for the region's economic growth this year. Consumer confidence in Germany rose as more people are optimistic about job growth in Europe's largest economy.

Growth in consumer confidence in Germany comes on the same day where a key report on consumer confidence in the U.S. is scheduled for release. The Conference Board is expected to say U.S. consumer confidence dipped slightly this month compared with August.

Economists polled by Thomson Reuters forecast the consumer confidence index dipped to 52.5 from 53.5 last month. It takes a reading of 90 to indicate a strong, healthy economy.

Confidence remains low in the U.S. as unemployment remains high and economic growth is tepid. But investors have been able to drive stocks sharply higher throughout September because economic data indicates the country is strong enough to avoid falling back into recession.

The Dow Jones industrial average has jumped 8 percent this month, putting it on pace for its best September since 1939.

In corporate news, dealmaking continued for a second day. Drug developer Endo Pharmaceuticals Holdings will buy Qualitest Pharmaceuticals for $1.2 Billion. A wave of dealmaking Monday wasn't enough to keep stocks from sliding Monday as traders pocketed some profits and some concerns remained about the health of Europe's banks.

The technology sector got a lift after Research in Motion Ltd. announced its rolling out a competitor to Apple Inc.'s iPad, called the PlayBook. The PlayBook is set to launch in early 2011 in the U.S.

Ahead of the opening bell, Dow Jones industrial average futures rose 19, or 0.2 percent, to 10,768. Standard & Poor's 500 index futures rose 1.70, or 0.2 percent, to 1,139.40, while Nasdaq 100 index futures rose 7.50, or 0.4 percent, to 2,014.75.

Bond prices wavered in a tight range. The yield on the 10-year Treasury note, which moves opposite its price, was unchanged at 2.53 percent late Monday.

The lack of movement in the bond market came after a report said the Federal Reserve could alter how it might purchase Treasurys in an effort to stimulate the economy. The Fed is now mulling a plan to buy small batches of Treasurys in a smaller scale program than making large purchases during a finite period like it did in 2009 during the recession. However, there is still no certainty it will re-enter the market at all. It hinted it could after a meeting last week.

Traders will also get a reading on home prices Tuesday. The S&P/Case-Shiller Home Price Index, which measures home prices in 20 of the nation's largest metropolitan areas, is expected to show a rise in prices slowed in July.

Economists predict the home price index rose 3.1 percent in July compared with a year earlier. That's down from the 4.2 percent gain in May.

Research in Motion shares rose 63 cents to $48.99 in pre-opening trading. Apple shares rose 63 cents to $291.80.

Overseas, Germany's DAX index rose 0.3 percent and France's CAC-40 rose 0.1 percent. Britain's FTSE 100 fell 0.5 percent.

Japan's Nikkei stock average fell 1.1 percent. Japan's economy was excluded from the Asian Development Bank's growth forecast, which only includes developing and newly industrialized countries.

[Associated Press; By STEPHEN BERNARD]

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