Thursday, Nov 03, 2011
--Stock futures erase losses to turn higher as Europe rebounds
--Europe reverses higher as doubts rise over a Greek referendum
--Jobs figures better than expected, show modest decline in news claims for unemployment benefits
By Brendan Conway and Tomi Kilgore
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--U.S. stock futures advanced Thursday morning after the European Central Bank cut its main policy rates, boosted by signs that Greece may avoid a referendum on a euro-zone bailout package and a government report showing that jobless claims in the U.S. fell slightly last week.
About an hour before Thursday's opening bell, Dow Jones Industrial Average futures rose 96 points, or 0.8%, to 11864, after being down more than 150 points in overnight trading. The Dow rallied 178 points on Wednesday, snapping a two-day losing streak that shed 573 points from the index.
Standard & Poor's 500-stock index futures rose 10 points, or 0.8%, to 1244 and Nasdaq 100 futures advanced 9 points, or 0.4%, to 2323. Changes in stock futures don't always accurately predict stock moves after the opening bell.
Futures erased early sharp losses after reports that Greek Prime Minister George Papandreou planned to submit his resignation Thursday following calls from members of his party for him to step down and allow the creation of a unity government. Other reports cast doubt on the chances for a popular referendum on the euro-zone bailout package, seen as making it likely that Greece would leave or be forced out of the euro zone.
In U.S. economic data, initial jobless claims fell by 9,000 to a seasonally adjusted 397,000 the week ended Oct. 29, the Labor Department said Thursday. In the prior week, jobless claims were revised up to 406,000 from an originally reported 402,000, according to the newly released figures.
European stocks erased earlier losses to turn higher, with the Stoxx Europe 600 up 1.5% after being down as much as 1.4% earlier in the session. Investor sentiment was buoyed after Greek Finance Minister Evangelos Venizelos said he opposed the referendum that Papandreou had announced and which had roiled equity markets earlier this week.
In addition, German Chancellor Angela Merkel and French President Nicolas Sarkozy said the next tranche of aid to Greece has been suspended until a decision about Greece's future in the euro zone is made.
Meanwhile, Asian bourses ended mostly lower amid uncertainty over euro-zone issues.
Gold futures rallied to $1,754.20 an ounce, while crude oil futures rose to $93.35 a barrel. The U.S. dollar lost ground against the euro and the yen.
Still ahead in economic data, a reading on service-sector activity in October and factory order data for September are due at 10 a.m. EDT.
In corporate news, shares of Kellogg lost 4.9% after the company reported weaker-than-expected third-quarter sales growth. The company also lowered its bottom-line guidance.
Kraft Foods gained 2% in premarket trading after the Dow component reported third-quarter earnings and revenue that exceeded expectations and raised its full-year outlook.
Qualcomm jumped 9.9% after the chip maker reported better-than-expected fiscal fourth-quarter results and provided an upbeat outlook for the current quarter.
Eastman Kodak declined 4.2% after reporting a wider third-quarter loss. The company also said it expected a deeper full-year loss from continuing operations and lower-than-anticipated revenue.
Estee Lauder Cos. rallied 7.7% after the beauty-products company declared a 2-for-1 split of its common stock, effective Jan. 20, and increased its annual dividend by 40% to $1.05 a share. In addition, the company's fiscal first-quarter results beat estimates and the full-year outlook was raised.
Limited Brands slid 3.6% after the apparel retailer's same-store sales growth in October fell short of expectations, offsetting a raised fiscal third-quarter earnings view.
-By Brendan Conway, Dow Jones Newswires; (212) 416-2670; brendan.conway@dowjones.com
(END) Dow Jones Newswires
November 03, 2011 08:51 ET (12:51 GMT)
