U.S. Stock Futures Rise as Jobless Claims Drop Before Fed

U.S.  stock futures  rose, indicating a second day of gains for benchmark indexes, as jobless claims fell to a two-month low and investors awaited testimony to lawmakers by Federal Reserve Chairman  Ben Bernanke.

Morgan Stanley rallied 3.4 percent as stock-trading revenue bolstered profit. International Business Machines Corp. added 2.3 percent after raising its full-year earnings estimate.  Intel Corp. lost 3 percent after forecasting third-quarter sales that may fall short of some analysts’ predictions.  EBay Inc. (EBAY)  tumbled 6.4 percent after its forecast for third-quarter sales missed estimates.

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July 18 (Bloomberg) -- Fewer Americans than forecast filed applications for unemployment benefits as the effects of auto-plant shutdowns began to ebb. Jobless claims dropped by 24,000 to 334,000 in the week ended July 13, the fewest since early May, from a revised 358,000 the prior period, Labor Department figures showed today in Washington. Trish Regan, Dominic Chu and Michael McKee report on " In the Loop." (Source: Bloomberg)

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July 17 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke comments on the central bank's asset purchases and the U.S. economy in testimony before the House Financial Services Committee in Washington. (Excerpts. Source: Bloomberg)

Futures (SPA)  on the Standard & Poor’s 500 Index expiring in September gained 0.2 percent to 1,679.30 at 8:39 a.m. in  New York. Contracts on the  Dow Jones Industrial Average  added 15 points, or 0.1 percent, to 15,455 today.

“We’re not expecting any blowout for U.S. earnings this quarter,” Jonathan Aldrich-Blake, who helps oversee about $10 billion at Ashburton Ltd. said by phone from  Jersey,  Channel Islands. “They will probably come in more in line with expectations than in previous periods and there hasn’t really been anything stellar so far. We’re looking at growth in the U.S. more towards the tail end of this year.”

The  S& P 500  rose yesterday as Bernanke said the pace of economic recovery will determine when the Fed reduces its asset purchases. In a prepared report, he said the central bank’s asset purchases are not on a preset course. Bernanke will continue his semi-annual testimony on monetary policy to the Senate Banking Committee today at 10 a.m. in  Washington, followed by questions from lawmakers.

Stimulus Debate

Central bank stimulus has helped fuel a surge in stocks worldwide, with the benchmark U.S. index  jumping  as much as 149 percent from its March 2009 low. Fed policy makers have been debating the timing and pace of any cuts in the central bank’s $85 billion in monthly bond purchases. Bernanke has said any reduction will be tied to sustained improvement in the labor market or an increase in inflation.

“Bernanke is really guiding the market so that there are no real shocks when Fed actions do take place,” Ashburton’s Aldrich-Blake said. “The ‘bad news is good news’ we saw in the market earlier this year is starting to die down as people have more belief in this recovery.”

A report today showed fewer Americans than forecast filed applications for  unemployment benefits  as the effects of auto-plant shutdowns began to ebb. Jobless claims dropped by 24,000 to 334,000 in the week ended July 13, the fewest since early May, from a revised 358,000 the prior period, Labor Department figures showed. The median forecast of 49 economists surveyed by Bloomberg projected 345,000.

Leading Indicators

Separate data from the Conference Board at 10 a.m. may show an index of leading indicators in the  U.S. economy  picked up last month, economists surveyed by Bloomberg predicted. A gauge of the outlook for the next three to six months rose 0.3 percent in June after climbing 0.1 percent in the prior month, according to the median forecast.

Some 32 companies, including Google Inc. and Microsoft Corp., are  scheduled  to post quarterly results today. Per-share earnings topped estimates at about 75 percent of S& P 500 members that have reported for the quarter so far, data compiled by Bloomberg show.

Morgan Stanley rose 3.4 percent to $27.45 after posting a 66 percent earnings increase that beat analysts’ predictions as trading revenue rose and profit margins at its wealth-management units climbed.

IBM Forecast

IBM rose 2.3 percent to $199 after predicting earnings will be at least $16.90 a share in 2013, up from its earlier prediction for $16.70. The company is betting that faster-growing market such as cloud computing and data analysis can offset a slowdown in information-technology spending.

SanDisk Corp., which makes  flash memory  to store data in mobile devices, gained 4.9 percent to $62.38. The company said it may post as much as $1.58 billion in sales for the third quarter, compared with the average analyst prediction of $1.49 billion.

Intel slid 3 percent to $23.43. The world’s largest semiconductor maker said late yesterday sales in the current period may miss estimates as a slump in the personal-computer market erodes its largest business.

EBay tumbled 6.4 percent to $53.70. Third-quarter sales will be $3.85 billion to $3.95 billion as e-commerce growth rates in  Europe and Korea  slow and currencies weaken against the  U.S. dollar, the online marketplace provider said. That’s less than the average analyst projection of $3.97 billion.

Celgene Corp. declined 2.3 percent to $133.50 after saying it will stop a late-stage trial of its Revlimid drug for treatment of leukemia in elderly patients because of the number of deaths in the study.

To contact the reporters on this story: Sofia Horta e Costa in London atshortaecosta@bloomberg.net Namitha Jagadeesh in London at  njagadeesh@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at  lthomasson@bloomberg.net