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U.S. stock futures point higher as Apple soars; Dow up 0.5%

Published 07/20/2011, 08:38 AM
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Investing.com – U.S. stock futures pointed to a higher open on Wednesday, as sentiment was boosted amid signs of progress in resolving the country’ debt ceiling debate, while Apple shares rallied ahead of the open on the back of robust earnings. 

Dow Jones Industrial Average futures pointed to a gain of 0.5%, the S&P 500 futures climbed 0.6%, while the Nasdaq 100 futures indicated a 0.9% gain.

U.S. President Barack Obama said Tuesday there had been “some progress” in talks with lawmakers on raising the USD14.3 trillion debt ceiling after endorsing a proposed USD3.7 trillion debt-reduction plan.

Meanwhile, Apple saw shares rally 5.7% in pre-market trade after it reported stronger-than-expected fiscal third quarter earnings late Tuesday, with profit more than doubling from the same period a year ago as iPhone and iPad sales surged.

The company said net profit rose to USD7.3 billion, compared to USD3.25 billion a year earlier. Revenue in the quarter soared 82% to USD28.57 billion.

The upbeat results prompted Goldman Sachs to raise its price target on the stock to USD525 from a previous estimate of USD485.

Dow component United Technologies saw shares jump 1.5% after it said second quarter revenue rose to USD15.1 billion, above expectations for revenue of USD14.6 billion. The company raised its full-year earnings outlook, citing growth at all six of its business segments. 

Shares in Qualcomm rose 2.7% as investors positioned themselves in the stock ahead of the company’s earnings results due after Wednesday’s closing bell.

On the downside, Yahoo saw shares slump 2% after it said second quarter revenue fell 5% to USD1.1 billion, as advertising sales declined. 

Other notable earnings slated for Wednesday include credit card giant American Express, chip manufacturer Intel and online auction website eBay. 

In deal news, chemical manufacturer Nalco saw shares soar 30.2% after it agreed to be acquired by Ecolab for approximately USD8 billion. Ecolab shares were down 3.1% ahead of the open.

Across the Atlantic, European stock markets were broadly higher amid optimism ahead of Thursday’s summit meeting of European Union leaders. The EURO STOXX 50 jumped 1.6%, France’s CAC 40 rose 1.5%, Germany's DAX edged 0.4% higher, while Britain's FTSE 100 advanced 1%            

During the Asian trading session, Hong Kong’s Hang Seng Index gained 0.45% higher, while Japan’s Nikkei 225 Index rallied 1.2% as technology stocks led gains.

Later in the day, the U.S. was to publish industry data on existing home sales, as well as a government report on crude oil inventories.

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