Stock Futures Spike as Housing Bright Spot Overshadows Cyprus
NEW YORK ( TheStreet) -- Stock futures indicated that major U.S. stock markets may snap a two-day losing streak after better-than-expected data on housing starts and building permits in February reassured investors the housing market remains a bright spot in the U.S. economy.
Futures for the Dow Jones Industrial Average were rising 26 points, or 40.94 points above fair value, to 14,416 after the index on Monday logged its largest two-day point and percentage decline since Feb. 26.
Futures for the S&P 500 were up 3.75 points, or 5.2 points above fair value, to 1,550.5 after two straight down days.
Futures for the Nasdaq were higher by 9 points, or 11.2 points above fair value, at 2,796.
The Census Bureau reported that housing starts, or new home constructions, rose to a seasonally adjusted annual rate of 917,000 in February from an upwardly revised 910,000 in January. Economists were expecting an increase to 915,000.
Furthermore, the government agency said that building permits, a proxy for future construction, increased to a 946,000 annual rate, compared to the predicted rise to a 925,000 rate. The prior month's figure was downwardly revised to a 904,000 pace.
The Federal Reserve begins its two-day policy meeting Tuesday and is scheduled to announce its latest policy stance at 2 p.m. the following day. Fed Chairman Ben Bernanke will hold a press conference at 2:30 p.m. on Wednesday.
"Based on his recent speeches and testimony, we expect on net dovish remarks that support our expectation for QE3 to continue well into next year," Michael Hanson, senior U.S. economist at Bank of America Corp. in New York, said in a Monday evening note.
U.S stocks slumped on Monday as investors considered that the harsh bailout plan mapped out by eurozone finance ministers for Cyprus could be enacted in other eurozone countries to recapitalize distressed banks.
European markets were trading sideways to lower on Tuesday as lawmakers in Cyprus got ready to vote on the details of how to go about raising €5.8 billion called for by the finance ministers for the near-bankrupt nation. The FTSE 100 in London was up 0.04% and the DAX in Germany was falling 0.29%.
The benchmark 10-year Treasury was rising 8/32, diluting the yield to 2.023%. The dollar was up 0.06%, according to the U.S. dollar index.
May crude oil futures were down a penny to $94.10 on the New York Mercantile Exchange.
AmerisourceBergen Corp (ABC) shares were jumping 5.59% to $51 in premarket trading Tuesday after the drug wholesaler announced a 10-year pharmaceutical distribution agreement with Walgreen(WAG) , the U.S.'s largest drugstore chain, and Walgreen affiliate and European drug wholesaler Alliance Boots. The deal also gives the companies rights to acquire a minority stake in AmerisourceBergen of up to 23%.