U.S. stock-index futures rise after five-day decline for S&P 500

AFTER A FIVE-DAY DECLINE for Standard & Poor's 500 Index, U.S. stocks rebounded Thursday, in anticipation of data on jobs and home sales that will help investors gauge the pace of the economic recovery. / BLOOMBERG NEWS FILE PHOTO/SCOTT EELLS
AFTER A FIVE-DAY DECLINE for Standard & Poor's 500 Index, U.S. stocks rebounded Thursday, in anticipation of data on jobs and home sales that will help investors gauge the pace of the economic recovery. / BLOOMBERG NEWS FILE PHOTO/SCOTT EELLS

LONDON – U.S. stock-index futures rose, signaling the Standard & Poor’s 500 Index will rebound from its longest losing streak this year, as investors awaited data on jobs and home sales to assess the pace of the economic recovery.
Bed Bath & Beyond Inc. gained 5.8 percent in German trading after raising the low end of its full-year earnings forecast. Caesars Entertainment Corp. slipped 4 percent as the casino operator began selling 10 million new shares. Hertz Global Holdings Inc. sank 7.4 percent after cutting its forecasts.
S&P 500 futures expiring in December rose 0.2 percent to 1,689.1 at 7:24 a.m. in New York. The benchmark gauge for U.S. equities has declined 1.9 percent in the past five days after closing at an all-time high on Sept. 18, as President Barack Obama failed to reach a deal with congressional Republicans over the federal budget. Contracts on the Dow Jones Industrial Average added 25 points, or 0.2 percent, to 15,235 today.
“Washington has been dragging their feet as of late but eventually they’ll be forced into action,” said Patrick Spencer, head of U.S. equity sales for Robert W. Baird & Co. in London. “We’ve been down this road before. It’s quite natural and healthy to have pull-backs in a bull market. We’ll shift into a stronger gear with a settlement on the budget and what I think will be a very positive earnings season.”
Investors will watch economic reports to help determine whether U.S. growth is sufficient for the Federal Reserve to begin reducing its $85 billion in monthly bond purchases. Revised data today may show the economy grew at an annualized 2.6 percent pace in the second quarter, compared with an earlier reading of 2.5 percent, economists predicted before the Commerce Department releases the figures at 8:30 a.m. in Washington.

Home sales

A separate report may show an index of pending home sales slipped 1 percent in August for a third consecutive month of declines, economists surveyed by Bloomberg projected. That would follow a 1.3 percent drop in the prior month, which was the biggest retreat this year. The National Association of Realtors releases the figures at 10 a.m. in Washington.

Fed Bank of Richmond President Jeffrey Lacker, who voted repeatedly last year against expanding stimulus, said the central bank’s $3.72 trillion balance sheet and guidance on the likely path of interest rates increase the risks and costs of policy mistakes.
“My concern is that the combination of forward guidance and a very large balance sheet has raised the likelihood of policy mistakes going forward, and also has raised the cost of such mistakes, should they occur,” Lacker said today in a speech at the Swedbank Economic Outlook Seminar in Stockholm.

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Stein, Kocherlakota

Fed Governor Jeremy C. Stein will speak on monetary policy from about 4:10 p.m. in Frankfurt, while Fed Bank of Minneapolis President Narayana Kocherlakota will speak from 12:15 p.m. in Houghton, Michigan.
Bed Bath & Beyond gained 5.8 percent to $78.52. The retailer predicted full-year adjusted earnings per share of $4.88 to $5.01, up from a previous range of $4.84 to $5.01. Profit rose to $1.16 a share in the fiscal second quarter, exceeding the average analyst estimate of $1.15, as comparable sales jumped 3.7 percent in the period. Analysts had predicted sales growth of 3.2 percent.
Caesars, which has $23.5 billion in debt, slipped 4 percent to $20.06 in Germany. As part of the share sale, underwriter Credit Suisse Securities has the option to purchase an additional 1.5 million shares, according to a statement late yesterday. The company had 126.3 million shares outstanding on Aug. 1, according to the latest quarterly regulatory filing.

Hertz drops

Hertz lost 7.4 percent to $23.88 in early New York trading. The rental-car company trimmed its forecast for full-year revenue and profit, citing weaker than anticipated car rentals at U.S. airports.
J.C. Penney Co. declined 6.3 percent to $9.48 in pre-market New York trading. The retailer may seek to raise $750 million to $1 billion by selling new shares, Reuters reported, citing three unidentified people familiar with the matter. The stock yesterday dropped to its lowest price since December 2000 on bets the company may run out of cash.

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