U.S. Stock Futures Rise on Improving Earnings, Housing Starts

U.S. stock futures advanced, a day after the biggest rally since November for the Standard & Poor’s 500 Index, as better-than-estimated earnings and housing data bolstered confidence in the economy.

Deere & Co., the largest maker of farm equipment, soared 7.7 percent after profit was boosted by lower raw-material costs. Whole Foods Markets Inc., the biggest U.S. natural-goods grocer, jumped 6.9 percent after raising its profit forecast. Home Depot Inc. gained 1.1 percent as Oppenheimer & Co. upgraded the shares. Beazer Homes USA Inc. and Hovnanian Enterprises Inc. rallied after the Commerce Department said work began last month on 591,000 houses at an annual rate.

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Futures on the S&P 500 expiring in March gained 0.5 percent to 1,098.7 at 8:52 a.m. in New York. Dow Jones Industrial Average futures increased 0.4 percent to 10,278 and Nasdaq-100 Index futures rose 0.5 percent to 1,807.75. Stocks in Europe climbed after results from BNP Paribas SA and Deutsche Boerse AG beat analysts’ estimates. Asian shares also advanced.

“We’ve seen reasonably good earnings numbers with some companies showing strong performance like John Deere today,” said Jason Cooper, who manages $2.5 billion at 1st Source Investment Advisors in South Bend, Indiana. “The economic data are showing improvement and we’re going in the right direction, but we’ve still got a long way to go.”

U.S. stocks rallied yesterday as New York manufacturing grew at the fastest pace in four months, signaling the global economic recovery is accelerating. The S&P 500 has fallen 4.8 percent from a 15-month high on Jan. 19 as widening fiscal gaps in Greece, Portugal and Spain spurred concern Europe faces another recession.

Earnings Beat Estimates

A record nine-quarter earnings slump is projected by analysts to have ended in the fourth quarter with an 80 percent increase in S&P 500 profits. Forty-five companies in the index are scheduled to release results this week, including Hewlett- Packard Co. today. More than 350 companies in the S&P 500 have reported fourth-quarter earnings since Jan. 11, and about 76 percent have beaten analysts’ estimates on a per-share basis, according to data compiled by Bloomberg.

Production at factories, mines and utilities is projected to have climbed 0.7 percent last month after a 0.6 percent gain in December, according to the median estimate of 78 economists surveyed by Bloomberg News. The Federal Reserve’s industrial production report is due at 9:15 a.m. in Washington.

Deere, Whole Foods

Deere surged 7.7 percent to $57.90. The company raised its full-year net income forecast to about $1.3 billion, from $900 million. The company also reported first-quarter profit of 57 cents a share, nearly tripling the average estimate in a Bloomberg survey.

Whole Foods climbed 6.9 percent to $32.64 in New York. Full-year earnings may total $1.20 to $1.25 a share, up from a previous forecast of $1.05 to $1.10. Analysts predicted $1.09, the average of 16 estimates in a Bloomberg survey. Separately, the shares were raised to “overweight” from “neutral” at JPMorgan Chase & Co.

Home Depot gained 1.1 percent to $29.77. The world’s largest home-improvement retailer was raised to “outperform” from “market perform” at Oppenheimer.

Campbell Soup Co. slipped 1.8 percent to $32.99. The world’s largest soupmaker cut its full-year sales growth forecast to 2.5 percent to 3.5 percent, from the prior range of 4 percent to 5 percent. The company said it still sees full-year adjusted earnings per share growth of 9 percent to 11 percent from 2009’s $2.21.

Walgreen Co. fell 1.1 percent to $33.70. The U.S. operator of more than 7,100 drugstores agreed to buy Duane Reade Holdings Inc. from affiliates of Oak Hill Capital Partners for $1.08 billion, including debt, to expand in metropolitan New York.

SanDisk Corp. rose 4.1 percent to $28.45. The biggest maker of flash-memory cards for digital cameras and mobile phones was raised to “overweight” from “equal weight” at Morgan Stanley by equity analyst Atif Malik.

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