Bloomberg News

U.S. Stock Futures Extend Gains on Retail Sales, Jobless Claims

July 14, 2011

July 14 (Bloomberg) -- U.S. stock futures extended gains after government data showed retail sales unexpectedly increased and jobless claims fell more than economists estimated, bolstering confidence in the economy.

Futures on the Standard & Poor’s 500 Index expiring in September gained 0.4 percent to 1,317.1 at 8:31 a.m. in New York. Dow Jones Industrial Average futures climbed 27 points, or 0.2 percent, to 12,452.

The 0.1 percent increase in retail sales reported by the Commerce Department compared with the median forecast of a 0.1 percent drop in the Bloomberg News survey of 80 economists. Excluding auto sales, purchases were little changed, the weakest performance since July 2010. Separate data showed initial jobless claims fell by 22,000 to 405,000 last week.

Futures rose earlier as higher-than-estimated earnings at JPMorgan Chase & Co. erased losses that followed Moody’s Investors Service’s announcement yesterday that it was reviewing America’s credit rating.

Federal Reserve Chairman Ben S. Bernanke is scheduled to testify to the Senate Banking Committee from 10 a.m. in Washington today. He signaled yesterday that the central bank has more tools for monetary easing should the economy weaken and stymie efforts to generate jobs for 14.1 million unemployed Americans.

The S&P 500 has rallied 95 percent since March 2009 as the Fed used large-scale asset purchases to buoy the economy and companies posted earnings that beat analysts’ estimates. The index has still fallen 3.4 percent since April 29 this year on concern the economic recovery is at risk and as Europe’s sovereign-debt crisis grows.

Moody’s said late yesterday the U.S. government may lose the Aaa credit rating it’s held since 1917 on concern the country’s debt limit will not be raised in time to prevent a missed payment of interest or principal. President Barack Obama is considering summoning congressional leaders to Camp David this weekend to work on a plan to raise the debt ceiling after yesterday’s negotiations on a deficit-cutting plan of at least $2 trillion stalled, two people familiar with the matter said.

To contact the editor responsible for this story: Michael Regan at mregan12@bloomberg.net


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