Futures inch higher as Allergan, banks gain

[June 07, 2018]   By Sruthi Shankar

(Reuters) - U.S. stock index futures edged higher on Thursday, with Allergan and banking shares setting Wall Street up for another round of gains.

The S&P 500 <.SPX> was set for its fifth day of gains, while the technology-heavy Nasdaq <.IXIC> closed at a record high for the third-straight day on Wednesday, as investors focused on strength in the U.S. economy and solid earnings reports, putting aside trade concerns.

At 7:25 a.m. ET, Dow e-minis <1YMc1> were up 72 points, or 0.29 percent. S&P 500 e-minis <ESc1> were up 3.25 points, or 0.12 percent and Nasdaq 100 e-minis <NQc1> were up 1.5 points, or 0.02 percent.

The CBOE Volatility index, a gauge of stock market volatility, eased to levels before the early February sell-off, last trading at 11.74 points.

Investors are likely to get more clues on trade, with top U.S. allies set to meet at the G7 summit in Canada.

The two-day meet starting Friday will be the first chance for world leaders to confront Trump in person, since U.S. tariffs on steel and aluminum imports from Canada, Mexico and the European Union were imposed last week.

All six of the other G7 countries — Britain, Canada, France, Germany, Italy and Japan — are now paying the tariffs.

Canada and Mexico have retaliated against a range of U.S. exports and the EU has promised to do so as well.

White House economic adviser Larry Kudlow said on Wednesday that Trump will meet French President Emmanuel Macron and Canadian Prime Minister Justin Trudeau during the G7 summit.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 18, 2018. REUTERS/Brendan McDermid

While Kudlow said Trump is not backing down from the tough line he has taken on trade, the comments appeared to calm investors.

Among stocks, Tesla <TSLA.O> dropped 0.5 percent after Morgan Stanley analyst Adam Jonas said it was unlikely that the electric car maker would reach its Model 3 production target of 5,000 per week, before the first half of 2019.

Tesla added about $5 billion in market value on Wednesday after billionaire Chief Executive Officer Elon Musk gave encouraging comments about Model 3 production.

Allergan <AGN.N> jumped 2.7 percent following reports that billionaire investor Carl Icahn acquired a small stake in the company.

Shares of Bank of America <BAC.N>, JPMorgan <JPM.N> and Citigroup <C.N> were up nearly 0.5 percent in premarket trading.

The S&P bank index <.SPXBK> rose 2.3 percent on Wednesday, helped by rising U.S. yields and an increase in mortgage applications for the first time in seven weeks.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)

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