economic activity

U.S. stock futures climb as investors await budget, Fed minutes

BLOOMBERG FILE PHOTO/JIN LEE
STOCK FUTURES ROSE in the United States as investors await Obama's budget and the release of minutes from the Federal Reserve meeting.
Posted 4/10/13

LONDON – U.S. stock futures rose, signaling the Standard & Poor’s 500 Index will gain for a third day, before President Barack Obama submits his budget to Congress and the Federal Reserve releases minutes of its March meeting.

Apple Inc. and Yahoo! Inc. climbed in early New York trading as the companies were said to discuss ways to collaborate more closely on mobile software. Realogy Holdings Corp. retreated 7.7 percent as the real estate broker forecast sales that missed analysts’ estimates and Apollo Global Management LLC began selling a stake.

Futures on the S&P 500 expiring in June increased 0.3 percent to 1,568 at 7:13 a.m. in New York. Contracts on the Dow Jones Industrial Average added 46 points, or 0.3 percent, to 14,656. U.S. stocks rallied for a second day yesterday amid optimism over quarterly earnings and speculation that tamed inflation would reduce pressure on Chinese policy makers to tighten credit.

“The budget will be the big thing today,” Nick Xanders, an equity strategist at BTIG Ltd. in London, told Anna Edwards on Bloomberg Television. “The question is if it’s enough to accommodate both sides. The House Republicans have their own version, and the Senate Democrats have theirs. Everyone’s thinking ‘yes, there will be more quantitative easing’ and it will last longer, but nobody is really asking if it’s working.”

Obama submits his proposed 2014 budget to Congress today, more than two months past the Feb. 4 deadline, after Democrats and Republicans deadlocked over taxes and spending.

Budget plan

The core of the plan would change the inflation calculation for Social Security cost-of-living increases, slowing benefit increases. It also would limit inflation adjustments to tax brackets, resulting in a larger tax bill for many Americans, according to an outline released by the White House.

While Obama’s fifth budget proposal stands little chance of becoming law because of opposition from Republicans who control the House, it emphasizes his priorities and will set the stage for talks on a broader debt-reduction package.

The Federal Open Market Committee releases minutes of its March 19-20 meeting at 2 p.m. in Washington. At that gathering, Chairman Ben S. Bernanke said further improvements in the U.S. labor market were needed for the Fed to consider reducing its monetary easing. Policy makers reiterated that the key interest rate will stay near zero as long as unemployment holds above 6.5 percent and the inflation outlook is less than 2.5 percent.

Constellation Brands Inc. and Bed Bath & Beyond Inc. are among six companies in the S&P 500 reporting earnings today. Members of the benchmark gauge will post a 1.8 percent profit decline in the first quarter, according to analysts’ projections compiled by Bloomberg.

Apple, Yahoo

Apple advanced 0.5 percent to $429 and Yahoo gained 1.9 percent to $24.28. Yahoo Chief Executive Officer Marissa Mayer has met with Eddy Cue, Apple’s senior vice president of Internet services, to explore ways Yahoo can be more deeply integrated into the software that runs on the iPhone and iPad, according to a person familiar with the matter, who asked not to be identified because the talks are private.

Facebook Inc. gained 1.4 percent to $26.97 in pre-market New York trading. General Motors Co. said it will test advertisements on the world’s largest social-network service a year after the automaker quit running marketing messages on Facebook’s website.

Worthington Industries Inc. surged 9.1 percent to $34.52 in after-market New York trading yesterday. The company bought Palmer Mfg. & Tank Inc., a maker of steel and fiberglass tanks, for $113.5 million, according to a statement. Worthington shares didn’t trade in Europe today.

Realogy retreats

Realogy, which owns the Century 21 and Coldwell Banker brands, declined 7.7 percent to $41.36 after the close of regular trading in New York. The company predicted first-quarter sales of $950 million to $960 million, less than the average analyst estimate of $997 million. Separately, Realogy said Apollo, the private-equity firm started by Leon Black, is offering 35 million shares for sale.

Health Management Associates Inc., the operator of acute- care hospitals, plunged 11 percent to $11.25 in early trading after it reduced the high end of its 2013 earnings forecast. Franklin, Tennessee-based rival Community Health Systems Inc. lost 1.9 percent to $43.08.

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