investing

U.S. stock-index futures advance on first trading day of 2012

BLOOMBERG NEWS FILE PHOTO JIN LEE
Traders work on the floor of the New York Stock Exchange in New York.
Posted 1/3/12

NEW YORK - U.S. stock-index futures climbed, indicating the Standard & Poor’s 500 Index will gain on its first trading day of the year, amid signs that manufacturing output is increasing from China to Australia and America.

Bank of America Corp. rallied 3.2 percent and JPMorgan Chase & Co. gained 1.9 percent as America’s two largest banks led financial shares higher. Boeing Co. advanced 1.5 percent after retaining a contract. Chevron Corp. and ConocoPhillips increased at least 1.4 percent as the price of oil climbed.

Futures on the S&P 500 expiring in March rose 1.5 percent to 1,271.6 as of 7:28 a.m. New York time. Dow Jones Industrial Average futures surged 182 points, or 1.5 percent, to 12,332.

“You’re starting to see people want to take more risks,” Frank Ingarra, who helps manages the Can Slim Select Growth Fund at Greenwich, Connecticut-based NorthCoast Asset Management LLC, said in a telephone interview. His firm oversees $1.4 billion. “They’re getting positioned to start the year off with a positive step.”

The S&P 500 has rallied 14 percent from last year’s lowest level on Oct. 3 as better-than-estimated economic data fueled optimism the world’s largest economy can shrug off concern over Europe’s sovereign-debt crisis. The gauge still recorded its first annual decline since 2008 last year.

Australian manufacturing expanded for the first time in six months, an industry survey showed today, adding to evidence the global economy is strengthening after Chinese and German factory-output reports beat economist estimates in the past two days. Data today may show a U.S. manufacturing gauge climbed to a six-month high in December, according to a survey of economists’ forecasts compiled by Bloomberg.

Budget Deficits

Forecasters at securities firms are more conservative on U.S. stocks than any time in seven years, predicting the S&P 500 will rise 7.2 percent in 2012 as budget deficits around the world limit gains.

The benchmark gauge will climb to 1,348 after it was virtually unchanged in 2011 and the U.S. beat every equity market in the developed world except Ireland, according to the average forecast of 12 strategists tracked by Bloomberg. That’s the smallest predicted return since 2005. Adam Parker of Morgan Stanley, whose estimate for 2011 proved the most accurate among current analysts, said Europe’s debt crisis will keep volatility above historical levels.

The S&P 500 had the 10th best performance among the world’s stock markets in 2011. The gauge posted a loss of 4/100ths of a point, closing at 1,257.6.

‘Durable Rally’

“We’ll form a base for a durable rally in the second half of the year,” Bob Parker, a senior adviser at Credit Suisse Asset Management, said in an Bloomberg Television interview today. “Monetary policy will remain exceptionally easy.”

Bank of America climbed 3.2 percent to $5.74, while JPMorgan rose 1.9 percent to $33.87.

Boeing advanced 1.5 percent to $74.46. The planemaker beat Lockheed Martin Corp. to keep a $3.48 billion, seven-year contract for the primary U.S. shield against intercontinental ballistic missiles.

ConocoPhillips rose 1.5 percent to $73.98, while Chevron gained 1.4 percent to $107.90.

Mead Johnson Nutrition Co. gained 4.6 percent to $71.90. U.S. regulators said they haven’t found evidence of any connections between the company’s baby formula and illnesses in four infants, which led some stores to pull the formula from shelves.

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