Dow Futures Rally After 3-Day Slump
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Dow futures zoomed higher on Wednesday on the heels of the blue-chip average's worst three-day performance in more than a month, but Nasdaq futures were weighed down by tech heavyweight Apple.
As of 8:05 a.m. ET, Dow Jones Industrial Average futures jumped 115 points to 12640, S&P 500 futures climbed 5.5 points to 1335 and Nasdaq 100 futures fell 9.3 points to 2539.
The Dow has shed 326 points, or 2.5%, over the past three trading sessions that have been driven by weak data and mounting concerns about Europe's debt crisis. However, strong quarterly results and full-year outlooks from blue-chip heavyweights Caterpillar (NYSE:CAT) and Boeing (NYSE:BA) gave sentiment a boost.
Caterpillar posted second-quarter earnings of $2.54 a share on revenues of $17.37 billion, topping the Street’s forecast of $2.28 on $17.11 billion. The world’s biggest heavy machinery maker also raised its full-year EPS outlook by a dime to $9.60, which is above the consensus estimate of $9.54.
Boeing unveiled second-quarter profits of $1.27 a share on sales of $20 billion, besting analysts’ estimates of $1.12 on $19.37 billion. The blue-chip aerospace giant also lifted its full-year guidance to between $4.40 and $4.60 a share.
Technology juggernaut Apple (NASDAQ:AAPL) was set to be a big weight on the Nasdaq after it reported disappointing quarterly profits and revenues on weak iPhone sales. The world's biggest company by market value saw its stock drop some 5% in pre-market action.
Elsewhere, market participants found solace in commentary from Ewald Nowotny, a member of the European Central Bank's governing council, suggesting the central bank may be willing to provide the European Stability Mechanism, the eurozone's permanent bailout fund, a banking license. Such a move could prove important because it would provide the ESM with direct access to ECB funding. Right now, the bloc's two rescue funds are capitalized by member states.
On the economic front, Wall Street will get fresh data on the U.S. housing market at 10:00 a.m. ET. Sales of new homes are forecast to have fallen to an annualized rate of 370,000 units in June from 386,000 the month before.
The euro got a boost on the news, recently jumping 0.72% to $1.2148. However, many analysts remained skeptical.
"We think this appeared to be said in a broad context of discussing potential options, rather than Nowotny arguing in favour of an ESM banking licence," analysts at Nomura wrote in a note to clients. "In our view granting the ESM a banking licence ... would be best viewed as a minor palliative rather than a crisis solution."
Oil futures edged higher. The benchmark contract traded in New York rose 16 cents, or 0.18%, to $88.65 a barrel. Wholesale New York Harbor gasoline slid 1.3% to $2.788 a gallon.
In metals, gold jumped $16.40, or 1%, to $1,597 a troy ounce.
The Euro Stoxx 50 rallied 1.1% to 2167, the English FTSE 100 rose 0.26% to 5514 and the German DAX climbed 0.82% to 6443.