Intel climbed 4.7 percent in Germany after the world’s largest chipmaker forecast rising sales this quarter and record profit margins for the year, fueling optimism that a rebound in technology spending is gathering steam,. Texas Instruments Inc. also advanced. JPMorgan, the second-biggest U.S. bank by assets, rose 2 percent in pre-market trading in New York.
Futures on the Standard & Poor’s 500 Index expiring in June gained 0.3 percent to 1,196.6 at 7:12 a.m. in London before a report forecast to show retail sales climbed for a third month. Dow Jones Industrial Average futures increased 0.3 percent to 10,995 and Nasdaq-100 Index futures rose 0.5 percent to 2,011.25. Stocks in Europe and Asia also advanced.
“All eyes are on earnings and outlooks of the big companies,” said Urs Eilinger, Zurich-based chief investment officer at Infidar Investment Advisory Ltd., which manages about $3.2 billion. “From cyclicals and information technology we should see surprisingly good numbers. I’m confident that the market can hold up at this level.”
Earnings Optimism
U.S. stocks rose for a fourth day yesterday as earnings optimism boosted technology, industrial and consumer shares, overcoming an early drop after Alcoa Inc.’s results called into question the strength of the economic recovery. The S&P 500 has surged 77 percent from last year’s low in March to the highest level since September 2008.
Combined profit for S&P 500 companies will increase 30 percent in the first quarter from a year earlier, according to analyst estimates compiled by Bloomberg. AMR Corp. and Yum! Brands Inc. are also due to report results today.
Credit Suisse Group AG raised its year-end estimate for the S&P 500 by 13 percent to 1,270 today, saying “equities still offer value relative to other asset classes.”
We “now believe that the renewed bear market in the S&P 500 that we had penciled in for the end of this year is likely to be a 2011 event,” London-based strategist Andrew Garthwaite wrote in a report.
The MSCI Asia Pacific Index climbed 0.7 percent today as Moody’s Investors Service boosted South Korea’s credit rating and Singapore raised its economic growth forecast. The Stoxx Europe 600 Index rose 0.3 percent as ASML Holding NV, Europe’s largest maker of semiconductor equipment, posted net income that beat analysts’ forecasts.
Intel Surges
Intel jumped 4.7 percent to $23.83 in German trading. Second-quarter revenue will climb as high as $10.6 billion, exceeding analysts’ predictions, and 2010 gross margins will widen to a record, the chipmaker said late yesterday. Net income surged almost fourfold in the three months through March.
Texas Instruments, the second-biggest U.S. chipmaker, rose 2.2 percent to $26.43.
JPMorgan advanced 2 percent to $46.80 in New York. The bank posted first-quarter earnings of 74 cents a share. Analysts surveyed by Bloomberg had estimated profit of 64 cents on average.
Morgan Stanley, the sixth-biggest U.S. bank by assets, dropped 0.5 percent to $30.34 as the bank was said to expect its global real-estate fund to lose $5.4 billion.
The firm sent a fourth-quarter update to investors in recent weeks showing the real-estate fund was likely to recover $3.4 billion of the $8.8 billion invested in 2007, said a person familiar with the situation, who declined to be identified because the information wasn’t public. A spokesman for Morgan Stanley declined to comment.
Time Warner Downgrade
Time Warner Inc. fell 1.4 percent to $32.30. The owner of the Warner Bros. movie studio was cut to “equal weight” from “overweight” at Morgan Stanley.
Retail sales in the U.S. probably climbed in March for a third straight month, a sign the economic recovery is broadening, analysts said before a Commerce Department report due at 8:30 a.m. in Washington.
Purchases increased 1.2 percent, the biggest gain in four months, after a 0.3 percent February increase, according to the median estimate of 79 economists surveyed by Bloomberg News.
A report from the Labor Department due at the same time may show the cost of living increased 0.1 percent in March after no change the previous month, according to the survey median. At 10 a.m., a second report from the Commerce Department may show stockpiles rose 0.4 percent in February as companies tried to have enough goods on hand to meet improving demand.
The Federal Reserve at 2 p.m. will issue its report on regional economic activity, known as the Beige Book, which policy makers use to help formulate monetary policy.