Stock Futures Rise Ahead of Yellen Testimony, Wal-Mart, Cisco Shares Retreat
NEW YORK (TheStreet) -- U.S. stock futures were pointing to broad market gains after Federal Reserve Vice Chair Janet Yellen said that the U.S. economy and job market still needs more support, encouraging expectations of prolonged quantitative easing.
However, gains were being offset by disappointing performances by Cisco
Futures for the S&P 500 were rising 2.75 points, or 2.85 points above fair value, to 1,781.5. Futures for the Dow Jones Industrial Average were up 9 points, or 10.37 points above fair value, to 15,788. Futures for the Nasdaq were down 6 points, or 5.06 points below fair value, to 3,396.
Wal-Mart shares were dipping 1.55% to $77.68 after disappointing top-line sales for the third quarter. Total revenue rose an anemic 1.7% to $115.7 billion. Analysts were expecting the company to post revenue of $116.8 billion. The Bentonville, Ark.-based retailing giant reported net income of $3.7 billion, or $1.14 a share, beating consensus estimates by a penny.
Kohl's also posted disappointing third-quarter results, falling short of earnings expectations by 5 cents at 81 cents a share as same-store sales at the department store operator fell 1.6% and contributed to a revenue miss. Shares were diving 9.29% to $52.85.
Cisco shares were dropping more than 11% to $21.34 after the networking-equipment giant reported Wednesday fiscal first-quarter revenue that missed Wall Street estimates, weighed down by weak spending that has hurt rival tech heavyweights.
Yellen, who's tipped to become the next head of the Federal Reserve, is to testify before the Senate Banking Committee at her nomination hearing at 10 a.m. EST.
A copy of her testimony released Wednesday evening indicated that Yellen will say that despite the significant improvement in the economy, an elevated unemployment rate and benign inflation suggests a further need for Federal Reserve accommodation.
"I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy," she said.
Weekly initial jobless claims fell by 2,000 to 339,000 in the week ended Nov. 9, the Labor Department reported Thursday, but still came in higher than the 330,000 expected by economists.
Global markets gained ground while Treasury yields eased, driven by confidence of continued Fed support. The FTSE 100 in London was adding on 0.61%, while the DAX in Germany was tacking on 0.73%.
The Hong Kong Hang Seng settled ahead by 0.82% and the Nikkei 225 in Japan increased 2.12%. The Japan markets also got a boost as Finance Minister Taro Aso stressed the possibility more measures to weaken the yen.
The 10-year Treasury was rising 4/32, pressuring the yield to 2.711% as the U.S. dollar index increased 0.35% to $81.21.
The S&P 500 soared on Wednesday to another all-time closing and intraday high of 1,782, boosted by a strong quarter from department store operator Macy's
-- Written by Andrea Tse