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U.S. Stock-Index Futures Advance as Schlumberger, Chevron Climb

 

Nov. 23 (Bloomberg) — U.S. stock futures rose, indicating the Standard & Poor’s 500 Index may rebound from its first weekly decline this month, before a report that may show sales of existing homes increased in October.

Schlumberger Ltd. climbed 2.6 percent as Credit Suisse Group AG recommended shares of the world’s largest oilfield- services provider. Chevron Corp., the second-biggest U.S. oil company, rose with crude prices. Deere & Co. gained 3.4 percent in early New York trading after Morgan Stanley upgraded the stock.

S&P 500 futures expiring in December added 1 percent to 1,100.7 at 8:44 a.m. in New York. Dow Jones Industrial Average Index futures climbed 0.9 percent to 10,391, and Nasdaq-100 Index futures increased 0.9 percent to 1,778.75. The dollar slumped 0.8 percent against a basket of six major currencies, snapping a two-day rebound.

“Investors continue to want to buy these pullbacks so long as you have an accommodative monetary policy backdrop and improving earnings picture between now and year-end,” said Craig Peckham, equity trading strategist at New York-based Jefferies & Co. “It doesn’t hurt stocks that you have another day of pressure on the dollar, which suggests the risk-on trade is certainly there.”

The S&P 500 has soared 61 percent from a 12-year low on March 9, pushing the gauge’s valuation to about 22 times the reported earnings of its companies last week, the highest level since 2002, according to weekly data compiled by Bloomberg. Stocks slipped last week as a worsening outlook for technology company earnings added to concern the eight-month rally in equities outpaced the prospects for economic growth.

Home Sales

Sales of existing U.S. homes probably increased in October to the highest level in more than two years, spurred in part by a tax credit that lured first-time buyers, economists said before figures from the National Association of Realtors due at 10 a.m. in Washington.

“If the home sales figures are better than expected, that sure will help the market,” said Walter Harecker, a Vienna- based fund manager at Constantia Privatbank AG, which oversees about $15 billion. “All data that has to do with real estate are important. We’ll see if the S&P can jump above 1,100 and stay there.”

Purchases rose 2.3 percent to a 5.7 million annual rate, according to the median forecast of 60 economists surveyed by Bloomberg News. The expected increase from September’s 5.57 million pace would be the sixth in the past seven months.

Schlumberger added 2.6 percent to $65 as Credit Suisse raised its recommendation on the stock to “outperform” from “neutral.”

Oil and Iran

Chevron climbed 1.3 percent to $77.74 and Exxon Mobil Corp., the largest U.S. oil company, advanced 0.9 percent to $75.08. Crude oil rose from a one-week low after an Iranian military exercise renewed concerns over Middle Eastern supply. The contract for January delivery increased as much as 2.6 percent to $78.72 a barrel on the New York Mercantile Exchange.

Newmont Mining Corp., the biggest U.S. gold producer, added 3.3 percent to $54 as bullion jumped to a record in London and New York. Other precious metals also gained, with copper and silver rising at least 1.7 percent.

Deere advanced 3.4 percent to $52.55 after the largest maker of agricultural equipment was raised to “overweight” from “equal-weight” at Morgan Stanley.

Nasdaq OMX Group Inc. added 3.1 percent to $19.55. Goldman Sachs Group Inc. lifted its recommendation for the second- biggest operator of U.S. stock exchanges to “buy” from “neutral,” saying “the pressure from declining market share is largely abating.”

Large Caps Outperform

For the first time since the equity rally began in March, the biggest U.S. stocks are beating the smallest as the dollar’s descent sends investors to companies with the most business in international markets.

The Dow average of companies with $111.4 billion in median market value rose 6.2 percent this quarter, compared with the 2.6 percent loss by the S&P SmallCap 600 Index, whose members are worth $572.3 million on average. The Dow had trailed by 26 percentage points following the stock market’s low on March 9.

The most accurate dollar forecasters predict the world’s reserve currency will continue sliding even when the Federal Reserve begins to raise interest rates, which policy makers say is an “extended period” away. Standard Chartered Plc, Aletti Gestielle SGR, HSBC Holdings Plc and Scotia Capital Inc. say the dollar will depreciate as much as 7.1 percent versus the euro.

The U.S. currency fell for the first time in three days against the euro on speculation the Federal Reserve will keep its stimulus measures in place and ensure interest rates remain low. The dollar slid against all but one of its 16 major counterparts after Fed Bank of St. Louis President James Bullard said he supported extending the central bank’s purchases of mortgage-backed securities beyond the first quarter of next year…read more at the Bloomberg

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