US stock futures push higher as worries ease

AP News
Posted: Sep 27, 2012 9:22 AM
US stock futures push higher as worries ease

NEW YORK (AP) — U.S. stock market futures rose Thursday, helped by expectations the People's Bank of China will soon take more steps to counteract a slowdown in the world's No. 2 economy.

Investors also got word from the Labor Department that the number of Americans seeking unemployment benefits last week plunged to the lowest level in nine weeks, a hopeful sign for the job market. .

Dow Jones industrial average futures added 57 points at 13,402. The broader Standard and Poor's 500 futures rose 7.1 points to 1,434. Nasdaq 100 futures gained 8.5 points at 2,782.80.

Continued economic struggles in the U.S., worries about a slowing Chinese economy and unrest in Europe have combined to pressure the markets this month, giving the S&P 500 its first five-day losing streak since July. Futures trading does not always indicate the direction of the markets once they open, but Thursday morning's trading pointed to the potential for that downside trend to reverse.

Investors were also reacting to a positive sign in a Commerce Department report on August business orders for durable goods, or items that are expected to last for at least three years. While the overall number dropped sharply because of a huge decline in commercial aircraft orders, business orders for machinery, electronics and other equipment, which are a good indication of their investment plans, rose 1.1 percent. That's the first increase since May.

One less positive sign came in another report from Commerce, which said that the U.S. economy grew even more sluggishly in the April-to-June quarter than previously thought. The agency revised the annual growth rate to 1.3 percent, down from its previous estimate of 1.7 percent. The revision mainly came as a result of slashing estimates for crop production by $12 billion, reflecting the drought that battered farms this summer.

China got some negative news on Thursday, as its biggest steelmaker said it has shut down a mill because of weakening growth While China's economy grew 7.6 percent in the three months ended in June, that's a sharp slowdown from a few years ago and is difficult for Chinese companies that rely on high growth to drive demand.

But worldwide, markets now expect the nation's central bank to step up efforts to stem the declines.

In Europe, investors regained their footing after mass protests in Greece and Spain over upcoming austerity plans, although the small gains did not make up for Wednesday's big losses. Greek leaders are meeting to decide on more spending cuts, while in Spain, the government is due to unveil new austerity policies in its latest budget.

The FTSE 100 index of leading British shares added 0.2 percent at 5,781while Germany's DAX rose 0.2 percent to 7,294. The CAC-40 in France was 0.6 percent higher at 3,436.

Asian markets closed higher. Hong Kong's Hang Seng climbed more than 1.1 percent and mainland China's Shanghai Composite Index jumped 2.6 percent. Japan's Nikkei 225 rose about 0.5 percent to 8,949.87, a day before the release of industrial production and retail sales figures.

U.S. stocks to watch on Thursday include the Campbell Soup Co., which said it plans to close two U.S. plants and eliminate more than 700 jobs. And Discover Financial Services Inc. posted a 3 percent drop in fiscal third-quarter profit, but beat Wall Street expectations.