U.S. stock-index futures rose, after the Standard & Poor’s 500 Index rallied for four straight weeks, as investors watched company earnings and awaited this week’s releases on employment and economic growth.
Kellogg Co. jumped 1.6% after announcing it will reduce its global workforce by seven% as part of a four- year cost-saving plan. U.S. Steel Corp. and AK Steel Holding Corp. gained more than 3.6% as Goldman Sachs Group Inc. raised its ratings on the companies. BlackBerry Ltd. tumbled 19% as Fairfax Financial Holdings Ltd. walked away from a $4.7 billion takeover plan.
Futures on the S&P 500 expiring in December (CME:SPZ13) gained 0.4% to 1,762.50 at 9:13 a.m. in New York. Dow Jones Industrial Average contracts rose 61 points, or 0.4%, to 15,603 today.
“The path of least resistance continues to be up,” James Dunigan, who helps oversee $118 billion as chief investment officer in Philadelphia at PNC Wealth Management, said by phone. “In general, the earnings picture is good. Valuations with the market at these levels are probably in the fair range. As you get into year-end portfolio adjustments, playing on that momentum we’ll likely see the market continue to do well here as opposed to selling off. I think if there are any sort of corrections they’ll be short lived in this environment.”
The equity gauge jumped 4.5% in October as the Federal Reserve decided to continue $85 billion in monthly bond purchases, and companies beat earnings forecasts. Investors are watching data to gauge the health of the U.S. economy after the Fed last week said it needs to see more evidence of sustained improvement before reducing the pace of its monthly bond purchases.
The economy probably slowed in the third quarter and employers hired fewer workers in October, economists project reports to show this week.
Gross domestic product grew at a 2% annualized rate after a 2.5% pace from April through June, according to the median forecast of 69 economists surveyed by Bloomberg before Commerce Department figures due Thursday. Growth in consumer spending, the biggest part of the economy, was probably the weakest since 2011. Payrolls rose by 125,000 workers last month after a 148,000 gain in September, Labor Department figures may show Friday.
“Even when the economic data hasn’t been terribly good, that just pushes the tapering of quantitative easing further away, which means there will be more of this free money floating for longer,” Frances Hudson, who helps oversee about $278 billion as Edinburgh-based strategist at Standard Life Investments Ltd., said by phone today. That’s “one of the big drivers for equity markets.”
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