December 29, 2010, The Wall Street Journal
U.S. stock futures remained slightly higher on Wednesday, with equities extending a rise that has the Dow industrials up more than 5% for the month so far, and looking at a double-digit gain for the year.
"Funds are positioned as they would like to be for the end-of-the-year photo," Marc Pado, U.S. market strategist at Cantor Fitzgerald, said of the very light volume and narrow volatility that has marked recent sessions.
"It would take a major bit of news to derail their plan," Pado added.
Shares of BJ’s Wholesale Club Inc. (BJ) were up 6.1% in the premarket after the New York Post cited unnamed sources as saying buyout firm Leonard Green & Partners might launch a hostile bid for the warehouse-club retailer.
Futures on the Dow Jones Industrial Average index rose 11 points, or 0.1%, to 11520, while those for the S&P 500 index gained 1.5 points, or 0.1%, to 1255.60. Futures on the Nasdaq 100 were up 5 points, or 0.2%, at 2230.5.
A day featuring a mixed bag of economic data nonetheless carried the blue-chip Dow gauge to a 28-month high Tuesday, up 20.51 points at 11575.54. The S&P 500 also gained, but the Nasdaq Composite Index fell slightly.
"I suspect the market will make attempts to close at a new high in sluggish trading," said Peter Cardillo, chief market economist at Avalon Partners, Inc. He said market participants s will also be watching an auction of 7-year Treasury notes Wednesday.
The government saw weak demand Tuesday from investors for an auction of 5-year notes, which has created a backdrop of bearishness for the $29 billion auction of 7-year notes, though the U.S. debt auction Monday went off better.
"Low liquidity might take a toll, but juicy yields and a building concession should bring enough buyers," said analysts at Nomura Securities in emailed comments, who reminded clients that the weak 5-year auction had taken place in a thin-volume market.
There’s no data on the calendar for Wednesday.
Alongside BJ’s, stocks expected to attract equity-market attention are Allstate Corp. (ALL), which has sued Bank of America Corp. (BAC) and its Countrywide Financial unit over a $700 million investment made by the insurer into residential mortgage-backed securities, according to media reports.
Metals prices are likely to be a focus of the markets after gold futures for February delivery closed up $22.70 at $1,405.60 an ounce Tuesday in the largest one-day gain since early November. Those futures were last off $3.40 to $1,402.20 an ounce.
Copper futures for March delivery fell 1 cent to $4.10 a pound after new highs were seen Tuesday. Record highs for copper were reported Wednesday in London.
Commodities rose as investors sought a hedge to a weaker dollar. The dollar was lower across the board, down against the euro at $1.3130 and off against the Japanese yen at Y82.19.
Crude-oil futures for February delivery were off 55 cents at $90.98 a barrel ahead of U.S. supply data later on.
European stocks were generally higher, but London stocks fell with investors returning uninspired after a long holiday break. Some mining stocks keyed on gains among metals.
In Asia, stocks in Hong Kong and Shanghai rebounded, led by banks and commodity shares, as investors moved past worries about the weekend rate hike in China.