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U.S. futures rise despite debt worries; Dow Jones up 0.36%

Published 10/16/2013, 06:52 AM
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Investing.com - U.S. stock futures pointed to a higher open on Wednesday, despite the ongoing U.S. political deadlock and the risk of a sovereign default if no agreement is reached before Thursday.

Ahead of the open, the Dow Jones Industrial Average futures pointed to a 0.36% increase, S&P 500 futures signaled a 0.33% rise, while the Nasdaq 100 futures indicated a 0.10% gain.

On Tuesday, Fitch ratings agency placed its triple-A rating on the U.S. on “rating watch negative” and said a downgrade is possible.

The ratings agency said the political impasse over a deal to reopen the government and raise the debt ceiling has undermined confidence in U.S. economic policy.

If an agreement to raise the federal borrowing limit is not struck ahead of Thursday’s deadline, the U.S. will face an unprecedented sovereign debt default.

Senate leaders were continuing negotiations aimed at ending the fiscal impasse, after a last minute deal put forward by House Republicans collapsed on Tuesday.

Apple was likely to remain in focus after the Wall Street Journal reported that the tech giant was cutting orders for its low-cost iPhone 5C, raising concerns about weak demand and sending shares down 0.42% in pre-market trade.

The decision came a day after Apple announced that Burberry CEO Angela Ahrendts will join the iPhone maker as senior vice president of retail and online sales next year.

Also in the tech sector, Intel tumbled 1.37% in extended trading, as the chipmaker said manufacturing snags will delay the new Broadwell line of processors, dampening confidence in its ability to roll out advanced technology that can win orders in the tablets and smartphones market.

In earnings news, Yahoo! Inc. rallied 1.26% in early trading, after the Web portal reported third-quarter profit that topped estimates.

Other stocks expected to be in focus included Bank of America, BlackRock, US Bancorp, Bank of NY Mellon and Northern Trust, scheduled to report quarterly earnings later in the day.

Across the Atlantic, European stock markets were lower. The EURO STOXX 50 slid 0.31%, France’s CAC 40 declined 0.83%, Germany's DAX fell 0.20%, while Britain's FTSE 100 retreated 0.64%.

During the Asian trading session, Hong Kong's Hang Seng Index shed 0.46%, while Japan’s Nikkei 225 Index added 0.18%.


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