U.S. stock futures rose Thursday, indicating stocks are set to soar at the open fueled by economic optimism after Germany and France unexpectedly returned to growth and the whole eurozone area declined by very little in the second quarter. Adding to sentiment were stronger-than-expected Wal-Mart earnings and, of course, investors generally liked the Federal Reserve statement on the "leveling out" U.S. economy yesterday.Update: following a surprise decline in retail sales, stock futures tempered their climb, still indicating stocks would start higher, but not as much.
Wal-Mart Stores Inc. (NYSE: WMT) reported second quarter earnings this morning, posting a surprise rise in profit, even if it was by a penny a share. Wal-Mart earned $3.45 billion, or 88 cents a share, up from $3.4 billion, or 87 cents a share, a year earlier. Sales, however, fell to $100.9 billion from $102.3 billion. This was above estimates for profit of 86 cents a share, but below sales estimates of $103.1 billion, according to Thomson Reuters. Wal-Mart raised the bottom end of its full-year profit forecast.
Overseas, stock markets were up globally, responding to the news out of Europe where economy barely contracted in the second quarter as Germany and France unexpectedly returned to growth, suggesting Europe's worst recession since World War II is coming to an end. GDP fell 0.1%, better than economists' estimates for a GDP declined of 0.5%.
At home, the number of foreclosures rose again, up 7 percent from June to July, as it doesn't seem the Obama plan to stem foreclosure is helping, or at least, not fully helping. Foreclosure filings were up 32 percent from the same month last year, RealtyTrac Inc. said Thursday.
More economic data is due out today:
- At 8:30 a.m. Eastern, July retail sales will be reported. Investors will look to the retail sector for further signs that the economy is getting back on track. Economists expect a 0.7 percent gain in July sales, and only a 0.1% without autos, according to Briefing.com, meaning much of the boost was thanks to the cash-for-clunkers program.
- At the same time, weekly initial jobless claims figures will continue to give the most recent picture on the employment situations.
- Also at that time, July import-export prices will be released.
- Finally, at 10:00 a.m., June business inventories are due out.
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