Futures rise on hope for China support

NEW YORK (Reuters) - U.S. stock index futures rose on Thursday, on track to snap a five-day losing streak as hopes grew the Chinese government would step in to bolster the country's slowing growth.

Chinese stocks rebounded from multi-year lows, buoying shares elsewhere in Asia, on speculation the China Securities Regulatory Commission would announce steps to support beleaguered domestic markets that could include more changes to initial public reforms. Traders also said China's central bank fed $57.9 billion into money markets this week, the largest weekly injection in history.

Cyclical sectors, which have sold off in recent sessions, will likely benefit from any measure to boost Chinese growth. Material and energy shares should be particularly strong as they are tied to demand forecasts.

The world economy has been relying on China's growth to make up for weakness in the United States and Europe. While the U.S. has shown signs of recovery and the Federal Reserve recently announced measures to support markets, slowing growth in China has been a concern, especially with Europe's debt crisis still in focus.

Spain is set to announce economic reforms and a 2013 budget on Thursday. The tension in Europe, underlined by anti-austerity measures in Madrid and Athens, contributed to the S&P's 1.9 percent drop over the past five days.

Despite the protests and international lenders admitting to difficulty in working out how to solve Athens' debt crisis, investors may look for bargains in U.S. stocks at these levels after their recent decline.

S&P 500 futures rose 7.9 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 45 points and Nasdaq 100 futures rose 12.5 points.

While early trading has followed Asia and Europe, market participants have plenty of domestic catalysts to look for today. Weekly jobless claims, the final read on second-quarter gross domestic product and August durable goods data will all be released at 8:30 a.m. (1230 GMT) August pending home sales data will then be released at 10.

Economic data has been mixed lately, though the housing market has shown signs of improvement. Pending home sales are seen staying flat in the latest month, while durable goods are seen falling 5 percent and jobless claims dropping by 4,000 to 378,000.

The GDP read is expected to hold steady from its previous reading at 1.7 percent.

The S&P 500 is up 5.2 percent so far for the third quarter and 1.9 percent for September, historically a weak month for equities. Gains were largely tied to actions taken by the U.S. Federal Reserve and European Central Bank to prop up their economies.

Nike Inc , Discover Financial and Micron Technology Inc are among the companies reporting results today, and investors will be looking for any sign that the economy is weighing on profits after Caterpillar Inc and FedEx Corp recently cut their forecasts.

Outlooks for the third quarter are at the most negative since 2001, according to Thomson Reuters data. The negative-to-positive ratio for the upcoming earnings period stands at 4.3 to 1.

The S&P 500 fell for a fifth straight trading day on Wednesday as the protests in Europe raised fresh concerns over the region's ability to get its debt crisis under control.

Source: http://news.yahoo.com/stock-index-futures-signal-higher-wall-street-open-084714680--finance.html

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