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U.S. futures edge higher as Fed news supports; Dow Jones up 0.29%

Published 10/09/2013, 06:47 AM
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Investing.com - U.S. stock futures pointed to a higher open on Wednesday, supported by news that Janet Yellen will become the Federal Reserve's next chairman, although concerns over the consequences of the current U.S. budget impasse still weighed.

Ahead of the open, the Dow Jones Industrial Average futures pointed to a 0.29% rise, S&P 500 futures signaled a 0.37% gain, while the Nasdaq 100 futures indicated a 0.35% increase.

Equity markets found some support ahead of Ms. Yellen’s nomination amid expectations that under her leadership Fed policy could remain accommodative for some time. If Ms. Yellen’s nomination is confirmed by the Senate, she will succeed Chairman Ben Bernanke, whose term ends January 31.

But investors remained cautious as a partial U.S. government shutdown dragged on into a second week, with few signs of progress towards a resolution ahead of an October 17 deadline to avoid a U.S. sovereign default.

International Monetary Fund Chief Economist Olivier Blanchard said Tuesday that a prolonged failure to raise the U.S. debt ceiling would "almost certainly derail the recovery".

Alcoa shares were up 3.65% in extended trading, after the aluminum producer kicked off earnings' season after the closing bell on Tuesday.

The company reported better-than-forecast quarterly earnings, thanks to a return to profitability in its smelting business and improving results at a unit that makes auto and aerospace parts.

Also reporting results late Tuesday, Yum Brands said third-quarter profit fell 68% and cut its 2013 earnings forecast as same-store sales dropped in China. The company's shares plunged 7.02% in after-hour trade.

Costco tumbled 1.32% pre-market, after reporting fourth-quarter profit that missed market expectations, as revenue climbed at a slower pace.

Elsewhere, Bloomberg reported that Delta Air Lines and AMR Corp.'s American Airlines were waiting on new jets stuck in Germany, as the partial shutdown of the U.S. government stalled deliveries across the global aerospace industry.

Other stocks likely to remain in focus included Family Dollar, scheduled to report quarterly earnings later in the day.

Across the Atlantic, European stock markets were mixed to higher. The EURO STOXX 50 climbed 0.40%, France’s CAC 40 advanced 0.50%, Germany's DAX added 0.20%, while Britain's FTSE 100 eased 0.06%.

During the Asian trading session, Hong Kong's Hang Seng Index declined 0.63%, while Japan’s Nikkei 225 Index jumped 1.03%.

Investors were awaiting the release of minutes from the Fed’s September meeting later Wednesday, after the U.S. central bank surprised markets with a decision to keep its stimulus program on track.


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