Futures rises as Fed downplays economic weakness

[May 04, 2017]  By Tanya Agrawal

(Reuters) - U.S. stock index futures were higher on Thursday, a day after the Federal Reserve left interest rates unchanged and expressed confidence in the strength of the economy.

* In a bullish statement, the central bank emphasized the strength of the labor market and said consumer spending continued to be solid, business investment had firmed and inflation has been "running close" to its target.

* Futures traders are now pricing in a 72 percent chance of rate hike in June, up from 63 percent before the Fed issued its statement, according to the CME Group's FedWatch Tool.

* Shares of banks, that benefit in a rising rate environment, were higher in premarket trading. Bank of America <BAC.N>, JPMorgan <JPM.N> and Citigroup <C.N> were up about 0.5 percent.

* Sentiment also got a boost after signs that centrist Emmanuel Macron was heading for victory in France's presidential election and from another round of strong quarterly reports from U.S. corporates.

* Earnings of S&P 500 companies have generally come in above expectations, pushing the benchmark index to within a percent of its all-time high.

* First-quarter profits at S&P 500 companies are estimated to have increased 14.2 percent, its strongest growth since 2011, according to Thomson Reuters I/B/E/S.

* Facebook reported surging quarterly profit and revenue, but its shares fell 1 percent to $150.21 as investors showed some nervousness about future earnings.

* Tesla  was down 1.6 percent at $306 after the electric-car maker posted a bigger-than-expected quarterly loss.

* Viacom rose 2.9 percent to $40.40 after the media company's results came in above expectations.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 3, 2017. REUTERS/Brendan McDermid

* Dunkin' Brands fell 1.5 percent to $55.50 after it said sales at Dunkin' Donuts U.S. stores were flat.

* Square rose 4.5 percent to $19.10 as the payments company raised its earnings forecast.

* Economic data due Thursday includes a report that is likely to show trade balance deficit widened in March, compared with February. The data is due at 8:30 a.m. ET.

* Another report is expected to show 10,000 fewer Americans filed for unemployment benefits last week than the week before.

Futures snapshot at 6:58 a.m. ET:

* Dow e-minis  were up 55 points, or 0.26 percent, with 14,303 contracts changing hands.

* S&P 500 e-minis  were up 6.25 points, or 0.26 percent, with 82,323 contracts traded.

* Nasdaq 100 e-minis  were up 17 points, or 0.3 percent, on volume of 16,997 contracts.

(Reporting by Tanya Agrawal; Editing by Savio D'Souza)

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