By Dow Jones Business News, October 16, 2013, 06:45:00 AM EDT
By Barbara Kollmeyer
MADRID--Stock futures pushed higher on Wednesday as investors kept an anxious but optimistic watch on the potential
for a budget deal out of Washington, D.C. A heavy earnings lineup is also promising to keep the day busy.
Companies reporting ahead of the bell include Bank of America Corp. ( BAC ), Bank of New York Mellon Corp. ( BK ), Abbott
Laboratories ( ABT ) and PepsiCo Inc. ( PEP )
Building on gains throughout the Asia and Europe session, futures for the Dow Jones Industrial Average rose 62 points,
or 0.4%, to 15,157, while those for the S&P 500 index rose 7.8 points, or 0.5%, to 1,699.80. Futures for the Nasdaq 100
index gained 6.75 points, or 0.2%, to 3,247.50.
Among the big names reporting early Wednesday, Bank of America ( BAC ) is projected to report third-quarter profit of 19
cents a share, according to analysts at J.P. Morgan.
PepsiCo is forecast to earn $1.17 a share in the third quarter, according to analysts in a Thomson Reuters poll.
Shares of Yahoo! Inc. (YHOO) could be in focus after it earned 34 cents a share in the third quarter, slightly above
the 33 cents a share forecast by analysts. Shares of Yahoo rose 1.7% in after hours on Tuesday.
Apple Inc. (AAPL) shares slipped in Frankfurt trading after a report the company is reducing orders for its lower-cost
iPhone 5C. Citing persons familiar with the situation, The Wall Street Journal reported Apple has notified two
assemblers for the phone that it will reduce orders for the fourth quarter. In addition, the Irish government reportedly
said it will close a tax loophole used by Apple.
Though U.S. stock futures lifted, European stocks fell and Asia was jittery as U.S. lawmakers raced against Thursday's
deadline to raise the debt ceiling and sort out a government shutdown that's in its third week. Investors shook off a
move by Fitch Ratings Service to put the U.S.'s credit rating on negative watch.
In a statement Tuesday, Fitch said "prolonged negotiations over raising the debt ceiling...risks undermining
confidence in the role of the U.S. dollar as the preeminent global reserve currency by casting doubt over the full faith
and credit of the U.S."
Senate leaders restarted talks on Tuesday evening to reopen the government and raise the debt ceiling after House
Republicans were unable to push forward a vote on a proposal of their own. "Senator Reid and [Minority Leader] Senator
McConnell have re-engaged in negotiations and are optimistic that an agreement is within reach," Adam Jentleson,
spokesman for Senate Majority Leader Harry Reid, said on Twitter.
Some analysts warned that lawmakers really didn't want to take a chance on the reaction of markets if no deal is
"Even though the consequences of a 'no deal' today is not technically a catastrophe, we expect a significant negative
market impact if politicians fail to get a deal through Congress before midnight," said Signe Roed-Frederiksen, senior
analyst at Danske Bank, in a note. "Such an outcome will send a signal of a completely dysfunctional U.S. political
system, which should weigh on both consumer and business sentiment, and increase general financial market anxiety."
Even a short-term deal may not be enough to keep Wall Street going, said others.
"Senate is set to reconvene at midday local time, but if we only get a temporary solution--and by all accounts that's
what we're expecting to see happen--it's difficult to imagine just how markets will find the confidence they need in
such an outcome," said the analyst team at Monex Capital Markets in a note.
Across other markets, gold prices were higher, but paring gains, while oil pushed slightly higher and the dollar
Write to Barbara Kollmeyer at AskNewswires@dowjones.com
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