U.S. Stock Futures Rise on Earnings Surprises

By Saumya Vaishampayan 

U.S. stock futures rose Wednesday, boosted by earnings from Intel Corp. and CSX Corp.

S&P 500 futures added six points, or 0.3%, to 2097. E-mini Dow futures rose 54 points, or 0.3%, to 18018, and e-mini Nasdaq-100 futures gained 11 points, or 0.3%, to 4409.

Intel Corp. was among the biggest gainers in the Dow and S&P 500, up 3.2% in premarket trade. The chip maker late Tuesday reported a 3% rise in net income on overall revenue that was flat with the year-ago period. Intel said last month that revenue would suffer in the first quarter due to sagging sales of personal computers. A bright spot was the data center group, which posted a 19% jump in revenue.

Rail operator CSX Corp. said late Tuesday earnings rose 11% in its latest quarter, beating expectations. The company also raised its dividend 13% and announced a new $2 billion share repurchase program. Shares rose 2.2% premarket.

Bank of America Corp. said Wednesday it swung to a first-quarter profit. Still, results missed analyst expectations, pushing shares down 0.6% premarket.

Gains in European stocks also added to the positive tone, with France's CAC 40 rising 0.7% and Germany's DAX adding 0.4%. The European Central Bank kept rates unchanged, as expected. The focus will now shift to ECB President Mario Draghi, who will speak this morning in a news conference.

"Central banks across the board still look like they're going to stay very accommodative and keep interest rates low for a long time, which equity investors like," said Chris Gaffney, president of EverBank World Markets.

U.S. stocks rose Tuesday, with the Dow adding 0.3% to 18036.70. The S&P gained 0.2% to 2095.84. With Tuesday's gains, the Dow is now 1.4% away from its all-time high of 18288.63 and the S&P is 1% below its record of 2117.39.

Many investors say the next catalyst for the stock market will come from first-quarter earnings. Expectations were slashed going into the reporting season as companies contended with the strong dollar and low oil prices in the period.

"The real question is not if the companies are going to meet those expectations, but what the forward guidance is going to be like," said Mr. Gaffney.

In commodity markets, gold futures slipped 0.1% to $1190.90 an ounce. Crude-oil futures gained 1.2% to $53.97 a barrel.

The yield on the 10-year Treasury note was at 1.903%, compared with 1.904% on Tuesday. Yields fall as prices rise.

Write to Saumya Vaishampayan at [e-mail]

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