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U.S. futures edge higher on ECB move; Dow Jones up 0.08%

Published 02/29/2012, 06:56 AM
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Investing.com - U.S. stock futures edged higher on Wednesday, as sentiment was mildly supported after a liquidity operation by the European Central Bank encountered more bidders than the previous operation in December.

Ahead of the open, the Dow Jones Industrial Average futures pointed to a rise of 0.08%, S&P 500 futures signaled a 0.12% increase, while the Nasdaq 100 futures indicated a 0.13% gain.

The ECB said that it had allotted EUR529 billion in three-year loans to European lenders, after receiving bids from 800 banks, significantly more than in the bank’s first long term refinancing operation late last year.

In December, the EBC issued EUR489 billion in three-year loans to 523 banks, averting a liquidity shortage in the euro zone’s banking system and easing pressure on the region’s bond markets.

The high uptake on the operation sparked concerns that banks in the region expect liquidity pressures to continue.

Financial stocks were expected to be active following the ECB loan operation and after several U.S. lenders disclosed that they have been approached by authorities investigating how Libor is set. Citibank edged up 0.06% in pre-market trade while shares in Bank of America fell 0.25%.

In addition, Goldman Sachs and Wells Fargo both said on Tuesday they may face federal enforcement action related to mortgage-backed securities deals leading into the financial crisis.

Meanwhile, JPMorgan inched up 0.08% after Chief Financial Officer, Doug Braunstein, said the bank aimed to lift profits by 25% and was targeting an annual net income of USD24 billion, up from the USD19 billion it earned last year.

Elsewhere, energy stocks were slated to be in focus after an injunction to suspend the Brazilian operations of oil major Chevron and offshore oil-rig contractor Transocean over a November oil spill northeast of Rio de Janeiro was declined by a federal judge in Brazil. Shares in the company rose 0.36% in pre-market trade.

BP dropped 0.54% as it was reported to be seeking to settle a lawsuit over the massive 2010 Gulf of Mexico oil spill by tapping a USD14 billion fund it set aside to compensate fishermen and businesses harmed by the disaster.

Other stocks in focus included Apple as a faster, better-equipped version of the company’s popular iPad tablet was expected to be unveiled at a media event next Wednesday to thwart increasing competition from rivals.

Across the Atlantic, European stock markets were mixed. The EURO STOXX 50 climbed 0.45%, France’s CAC 40 rose 0.49%, Germany's DAX advanced 0.40%, while Britain's FTSE 100 edged down 0.08%.

During the Asian trading session, Hong Kong's Hang Seng Index rose 0.35%, while Japan’s Nikkei 225 Index added 0.1%.

Later in the day, the U.S. was to release a preliminary report on fourth-quarter gross domestic product, followed by data on manufacturing activity in the Chicago area.

Federal Reserve Chairman Ben Bernanke was also due to testify on the semi-annual monetary policy report before the House Financial Services Committee in Washington.


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