Nasdaq futures advance as Amazon, Microsoft rally on earnings

October 25, 2013 04:17 AM

Nasdaq 100 Index futures rose after revenue from Inc. and Microsoft Corp. topped estimates while investors watched economic data for signs on when the Federal Reserve may scale back monetary stimulus. surged 7.5% as consumers flocked to the largest online retailer ahead of the holiday shopping season, helping to curtail losses. Microsoft jumped 6.3% as the company relied on corporate software demand to make up for weak consumer personal-computer purchases. United Parcel Service Inc. climbed 2.1% after net income more than doubled as the company carried more U.S. shipments at higher rates.

Futures on the Nasdaq 100 Index climbed 0.2% to 3,377.75 at 8:36 a.m. in New York. Standard & Poor’s 500 Index futures expiring in December fell 0.1% to 1,746.90. The benchmark index is up 0.4% for the week. Contracts on the Dow Jones Industrial Average lost 14 points, or 0.1%, to 15,440 today.

“Some profit taking might be overdue as we have had quite a run recently,” Philippe Gijsels, chief strategist at BNP Paribas Fortis in Brussels, said. “Longer-term, you should be looking at economic data, corporate data, but clearly what’s driving markets right now is central-bank accommodation. What spooked the markets was the tapering fears and now it’s postponed to early 2014. That will support equities.”

The S&P 500 has advanced 4.2% this month, closing at a record of 1,754.67 on Oct. 22, as lawmakers agreed to raise the government’s borrowing limit, avoiding a sovereign default. Equities are heading for their third weekly rally as signs of slower economic recovery fueled bets the Fed will wait until March before scaling back bond purchases.

Durable Goods

Data today showed orders for U.S. durable goods rose in September by the most in three months as stronger demand for commercial and military aircraft outweighed a drop in business equipment. Bookings for goods meant to last at least three years increased 3.7% after a revised 0.2% gain in August, the Commerce Department said. The median forecast of 67 economists surveyed by Bloomberg called for a 2.3% increase.

A release at 9:55 a.m. Washington time may show the Thomson Reuters/University of Michigan consumer sentiment index fell to 75 this month, the lowest since January, from 77.5 in September, according to the median economist estimate in a Bloomberg News survey before today’s data. A preliminary reading for October came in at 75.2.

Sixteen S&P 500 report earnings today. Of the 243 members of the gauge that have released results so far, 76% exceeded analysts’ predictions for profit, while 54% beat sales estimates, data compiled by Bloomberg showed.

Earnings Estimates

Amazon jumped 7.5% to $357.15. Chief Executive Officer Jeff Bezos has poured money into the Seattle-based company’s delivery network, cloud-computing services and line of Kindle e-readers and tablets, sacrificing near-term profits to fuel growth. That could put Amazon on track to outpace the e- commerce market, where sales are seen climbing 15.5% to $83.2 billion, according to EMarketer Inc.

Microsoft rallied 6.3% to $35.84. The world’s largest software maker is undergoing unprecedented changes, conducting its first-ever CEO search to replace Steve Ballmer and starting an organizational overhaul aimed at bolstering sales by focusing on devices and services.

Parcel Revenue

UPS jumped 2.1% to $96.50. The world’s largest- package delivery company beat analysts estimates for third- quarter earnings. The company said revenue from each domestic parcel rose 1% and daily package volume was up 2.3%. UPS and rival FedEx Corp. are considered economic bellwethers because of the variety of goods they ship around the world.

Zynga Inc. surged 12% to $3.95. The maker of social- networking games reported its first quarter under Chief Executive Officer Don Mattrick, recording a smaller-than- forecast loss as purchases of items used in games exceeded the company’s forecast.

Yahoo! Inc. lost 1.6% to $32.55 after Yahoo Japan Corp. forecast full-year sales and profits that missed analysts’ estimates.

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