U.S. Stock Futures Advance as Europe, China Fuel Optimism

New York (Nov 21)  U.S. stock-index futures climbed, with the Standard & Poor’s 500 Index poised for a fifth week of gains, as optimism in the global economy grew after central banks in China and Europe signaled additional stimulus measures.

Yahoo! Inc., Twitter Inc., and Apple Inc. gained more than 0.7 percent, indicating technology stocks may advance. Ross Stores Inc. rose 5.3 percent after raising its full-year earnings forecast. GameStop Corp. slumped 9.3 percent after lowering its full-year earnings forecast.

Futures on the S&P 500 expiring in December rose 0.8 percent to 2,068.9 at 8:51 a.m. in New York. The S&P 500 has advanced 0.6 percent this week, pushing its gains in 2014 to 11 percent. Dow Jones Industrial Average contracts added 148 points, or 0.8 percent, to 17,842 today. Both benchmark gauges rose to all-time highs yesterday after data showed improvement in the U.S. economy.

“Equities are tracking investor confidence,” Andrew Herberts, the Edinburgh-based head of U.K. private investment management at Thomas Miller Investment Ltd., said by phone. His firm oversees $3.9 billion. “You’ve seen Draghi talk up markets reasonably well, but people are waiting to see what he can deliver. Fundamentals are setting up nicely, but the U.S. will have to keep delivering.”

European Central Bank President Mario Draghi said he will do what is necessary to raise inflation in the region as fast as possible. Should the current policy not be effective, the ECB will “broaden even more the channels” through which it intervenes, by adjusting the size, pace and composition of asset purchases, he said in Frankfurt.

Rate Cut

Global equities extended gains after China cut its benchmark interest rates for the first time since July 2012. The People’s Bank of China lowered its one-year deposit rate and the one-year lending rate, with changes effective tomorrow, according to its website.

Concern that economic recoveries from the U.S. to Europe and Japan are failing to spur inflation has been cited by central bankers worldwide as justification for prolonged stimulus efforts.

“High-level central bank action is a significant focus for the markets, particularly interest rate changes and methods used to stimulate growth, such as quantitative easing, which impact every type of investor,” Darren Hepworth, the Leeds, United Kingdom-based global trading director at TD Direct Investing (Europe) Ltd., said by e-mail.

Source: Bloomberg