By Dow Jones Business News, October 11, 2013, 09:25:00 AM EDT
--Stock futures little changed following Thursday's rally, as debt-ceiling talks continue
--J.P. Morgan Chase rises in premarket after 3Q results; Wells Fargo declines
--Preliminary reading on October consumer sentiment on tap after the open
By Tomi Kilgore
NEW YORK--U.S. stock futures were little changed on the heels of the biggest rally for blue chips in nearly two years,
as talks in Washington to raise the debt-ceiling continued and following mixed results from two banking giants.
About 30 minutes ahead of the open, Dow Jones Industrial Average futures ticked up one point, or less than 0.1%, to
15034. On Thursday, the Dow soared 323 points, the biggest one-day point gain since December 2011, on signs that
political gridlock was nearing an end.
S&P 500 index futures inched down one point, or 0.1%, to 1684, and Nasdaq 100 futures added two points, or 0.1%, to
3195. Changes in stock futures don't always accurately predict stock moves after the opening bell.
The S&P 500 rose 2.2% Thursday to close at levels not seen since before the government started shutting down. The
index has recovered more than half of what it lost in the three weeks since it closed at a record high of 1725.52 on
House Republicans met with U.S. President Barack Obama Thursday, and offered a six-week extension to the nation's debt
ceiling in exchange for negotiations on budget cuts. Although the meeting ended without a deal, an agreement to begin,
and continue negotiating, was seen as a breakthrough following weeks of stalemate, with a partial government shutdown
entering its 11th day.
"Today, we still have a little bit of that 'feel-good' feeling from yesterday's ultimate sugar rush," said Kent
Engelke, chief economic strategist at Capitol Securities Management. "Nothing has been resolved, but the expectation is
that it will be."
He said there is a question as to how long the good feeling will last. But even if Congress just keeps prolonging the
discussions, he said at least investors can start focusing on earnings for a while.
"Even though we've kicked the can down the road, the impact of each [political] crisis is getting less," Mr. Engelke
J.P. Morgan Chase gained 1.1% in premarket trading despite swinging to a rare loss in the third quarter as it reeled
from billions of dollars in legal expenses. But the Dow component's adjusted earnings were better than expected on
strength in deposit growth, credit-card spending and investment-banking results.
Leading up to the report, the stock was little changed over the last month, and since the end of the second quarter.
Wells Fargo shed 2% after the nation's largest mortgage lender reported third-quarter earnings that topped estimates
but revenue that fell a bit shy, amid lower mortgage-banking revenue and a decline in net interest margin.
At 9:55 a.m. EDT, a preliminary reading of the Thomson-Reuters/University of Michigan consumer sentiment index for
October is expected to slip to 75 from a final September reading of 77.5. Data on retail sales, wholesale inflation and
business inventories have been postponed due to the partial government shutdown.
The yield on the 10-year Treasury note slipped to 2.663% from 2.686% late Thursday.
November crude-oil futures fell 1.2% to $101.79 a barrel. The International Energy Agency raised its oil-demand growth
forecast, but also lifted its supply-growth estimate. October gold futures lost 0.7% to $1,288.20 an ounce. The dollar
edged higher against the yen but lost some ground against the euro.
European markets got a further lift from optimism over U.S. debt-ceiling talks, with the Stoxx Europe 600 up 0.2%
after rising 1.7% Thursday.
Asian markets were broadly higher on the back of U.S. strength, with Japan's Nikkei Stock Average rising 1.5% and
China's Shanghai Composite climbing 1.7%.
In other corporate news, Gap shed 4.3% after the apparel retailer said late Thursday September same-store sales
declined from a year ago in all of its branded stores.
Safeway rallied 6.9% after the grocery-store chain said it would exit the troubled Chicago market, bowing to pressure
from activist shareholder Jana Partners. The company also reported late Thursday third-quarter adjusted earnings that
missed analyst forecasts.
Write to Tomi Kilgore at firstname.lastname@example.org
(END) Dow Jones Newswires
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