Stock futures rise, traders try to build on rally

[May 26, 2010]  NEW YORK (AP) -- Stock futures rose Wednesday as investors try to build momentum following a late-day rally during the previous trading session.

The Dow Jones industrial average closed down just 22 points Tuesday after being down by more than 250 points shortly after trading opened. The bounce back was stoked by comments from Congressional leaders saying they would not push for banks to spin-off lucrative trading desks as part of financial regulation reform.

Big swings in trading have again become the norm in recent weeks, similar to the volatility that helped define the market during the credit crisis and the early parts of the recovery last year.

The end-of-session focus Tuesday on domestic news was a stark contrast from what had been driving trading for the past few weeks. Investors had been almost wholly focused on whether steep budget cuts to manage rising debt in European countries would slow a global economic recovery in the coming months.

Concern about Europe's health was overshadowing consistent reports that the U.S. economy was continuing its slow, steady growth. Early in the year, those reports pushed stocks higher.

Reports Wednesday on durable goods orders and new home sales are expected to provide further evidence that the U.S. economy is improving.

Ahead of the opening bell, Dow Jones industrial average futures rose 56, or 0.6 percent, to 10,081. Standard & Poor's 500 index futures rose 7.00, or 0.7 percent, to 1,080.00, while Nasdaq 100 index futures gained 9.50, or 0.5 percent, to 1,825.00.

Economists polled by Thomson Reuters forecast orders for big-ticket factory goods rose 1.3 percent last month, rebounding from a 1.2 percent drop in March. The U.S. manufacturing sector has received a boost from exports, so any slowdown in Europe could eventually stall expansion.

For now though, the manufacturing sector has shown some of the most consistent growth in the economy.

The Commerce Department report is due out at 8:30 a.m. EDT.

A separate report from the Commerce Department is expected to show sales of new homes rose 4.6 percent in April to a seasonally adjusted annual rate of 430,000 units. The results could have been boosted as home buyers rushed to take advantage of a tax credit that expired at the end of last month. The report is due out at 10 a.m. EDT.

Even though signs still point to recovery in the U.S., concerns about Europe remain. The euro, which is used by 16 European countries, fell again Wednesday. The currency has become a proxy for investor confidence in Europe's ability to contain its debt problems the health of the continent's economy. The euro remains close to the four-year low it hit last week. It was down to $1.2312 Wednesday.

Despite the ongoing concerns, major European indexes snapped back after big losses Tuesday.

Britain's FTSE 100 gained 2 percent, Germany's DAX index rose 1.8 percent, and France's CAC-40 climbed 2.4 percent.

Meanwhile, U.S. Treasury prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.23 percent from 3.16 percent late Tuesday

[Associated Press; By STEPHEN BERNARD]

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