Stock futures point toward higher opening
By STEPHEN BERNARD
AP Business Writer
NEW YORK (AP) - Stock futures are pointing to a higher opening Monday, but are slightly off their highs after a new report showed retail sales rebound in October boosted mainly by auto sales.
Overseas markets are higher as a weakening U.S. dollar and stronger gold prices are again boosting commodities and shares of resource companies.
The Commerce Department said retail sales rose 1.4 percent in October, easily surpassing the 0.8 percent boost economists polled by Thomson Reuters forecast. It was a sharp rebound from a 2.3 percent decline seen in September.
However, excluding the boost from autos, sales rose just 0.2 percent, half the increase economists predicted, tempering some of the excitement over the data. Futures pulled back slightly after the report.
Consumer spending accounts for about 70 percent of all economic activity. Analysts widely agree a recovery at the consumer level is needed for a strong recovery, especially as government stimulus programs expire and unemployment remains high.
Ahead of the opening bell, Dow Jones industrial average futures rose 62, or 0.6 percent, to 10,304. Standard & Poor’s 500 index futures rose 8.70, or 0.8 percent, to 1,100.10, while Nasdaq 100 index futures rose 9.50, or 0.5 percent, to 1,797.75.
General Motors Co. said it lost $1.2 billion in its first quarter since emerging from bankruptcy. Despite the loss, it said it will begin to repay $6.7 billion in government loans and was seeing a stabilization in its business.
Home improvement retailer Lowe’s Cos. said its profit dipped 30 percent in the third quarter, but it matched earnings expectations. Despite the declining earnings, Lowe’s said it is seeing stabilization in some of the hardest hit housing markets.
Investors will get plenty more insight into consumers as key retailers such as Home Depot Inc., Target Corp. and TJX Cos., the parent of TJ Maxx all report earnings Tuesday.
Corporate outlooks from the companies will be just as critical as actual quarterly results because they are entering the key holiday shopping season. Disappointing sales through the end of the year could put a halt to the market’s ongoing climb.
Other economic readings on inflation, housing starts and industrial production are due out later in the week and could provide further evidence of the speed of a recovery. The Labor Department also reports its weekly unemployment claims data on Thursday.
Stocks are looking to build on last week’s strength when major indexes rose more than 2 percent. On Friday, the market was buoyed by encouraging earnings reports and outlooks from major retailers Abercrombie & Fitch Co. and J.C. Penney Co. as well as The Walt Disney Co.
Meanwhile, bond prices were mixed Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.39 percent from 3.42 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.07 percent from 0.05 percent.
The dollar mostly fell against other major currencies, while gold prices continued to climb higher hitting another record. Gold rose $10.40 to $1,127.10 an ounce after hitting a new record of $1,133.50 earlier in the day.
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