Stock futures edge up after selloff;
Yellen testimony on tap
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[May 07, 2014]
By Chuck Mikolajczak
NEW YORK (Reuters)
— U.S. stock index futures edged up on Wednesday, following
the biggest drop in the S&P 500 since mid-April, as earnings season
began to wind down and ahead of congressional testimony from Federal
Reserve Chair Janet Yellen.
U.S. stocks fell on Tuesday, closing at session lows as the S&P 500
suffered its biggest percentage decline since April 11. AIG dragged
on financial shares after disappointing earnings and a slide in
Twitter hurt other names in the technology and internet space.
Twitter shares rebounded in premarket trading Wednesday, adding 1.5
percent to $32.32.
Over 20 S&P 500 companies are scheduled to report earnings on
Wednesday. Whole Foods Market Inc <WFM.O> tumbled 16.8 percent to
$39.90 in premarket trading after the organic grocer posted
second-quarter results and cut its 2014 outlook on Tuesday.
Testimony from Fed Chair Yellen to the Joint Economic Committee,
scheduled for 10:00 a.m. (1400 GMT), will be closely monitored.
While Yellen is largely expected to maintain a dovish policy stance,
investors will be searching for clues on how soon interest rates
will be raised, which many expect to see beginning in 2015.
According to Thomson Reuters data through Tuesday morning, of 397
companies in the S&P 500 that have reported earnings, 67.5 percent
beat expectations, above the 63 percent average since 1994 and 66
percent beat rate for the past four quarters.
Profits are now expected to rise 4.6 percent this quarter, down from
the 6.5 percent growth rate estimated at the start of the year, but
above the low of 0.6 percent in mid-April, according to Thomson
S&P 500 e-mini futures rose 3.9 points and were above fair value, a
formula that evaluates pricing by taking into account interest
rates, dividends and time to expiration on the contract. Dow Jones
industrial average e-mini futures gained 37 points and Nasdaq 100
e-mini futures added 6.75 points.
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Economic data expected on Wednesday includes the preliminary first
quarter reading on productivity and labor costs at 8:30 a.m. EDT
(1230 GMT). Expectations are for a 1 percent decline in productivity
after the final fourth quarter reading was revised sharply lower to
growth of 1.8 percent.
Electronic Arts surged 19.3 percent in light premarket trading after
the video game publisher posted quarterly profit and revenue that
beat expectations late Tuesday.
European stocks edged lower, as Tuesday's selloff on Wall Street
unsettled investors and results from brewer Carlsberg and bank
Societe Generale showed the Ukraine crisis was starting to hurt
large Western companies.
Asian shares stumbled to a one-month low as the heightened
possibility of Ukraine slipping into civil war depressed risk
(Reporting by Chuck Mikolajczak; Editing by Bernadette Baum)
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