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NEW YORK (Reuters) – Stock futures rose on Wednesday as the latest offers in ongoing U.S. budget negotiations underlined hopes for a deal, while technology shares were lifted by strong results from Oracle.
The SP 500 is on track to extend its best two-day run in a month, a sign that investors are looking past the “fiscal cliff,” a combination of tax hikes and spending cuts many fear could push the economy into recession if they take effect next year.
President Barack Obama’s most recent offer to Republicans in the ongoing fiscal talks made concessions on taxes and social programs spending, amid concerns from Senate Democrats. House Speaker John Boehner said he remained hopeful about an agreement, though the offer was “not there yet.”
“Both Obama and Boehner have been making concessions, suggesting a deal will get done before the deadline, resulting in an acceleration in stock buying,” said Adam Sarhan, chief executive of Sarhan Capital in New York.
Tech shares will be in focus a day after Oracle Corp (ORCL.O) reported earnings that beat expectations on strong software sales growth. Shares rose 2.1 percent to $33.56 in premarket trading.
FedEx Corp (FDX.N) reported second-quarter revenue that beat expectations, but said its earnings in the quarter had been impacted by Superstorm Sandy. Shares were slightly lower in light premarket trading.
SP 500 futures rose 2.7 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 37 points and Nasdaq 100 futures rose 10.5 points.
The SP has gained 2.3 percent over the past two sessions, the first time it has notched two straight days of 1 percent gains since late July. Markets have been supported by any indication agreement might be reached, with banks and energy shares- groups that outperform during periods of economic expansion – leading gains.
“We’ve been breaking above levels of resistance, including the 50-day moving average and the November high, so from a technical standpoint we’re seeing a lot of improvement,” Sarhan said. “We’re set up for a strong 2013.”
Trading volume has been light ahead of the holidays and as some caution remains over the cliff. Equities have struggled to gain ground in recent weeks amid signs there was little room for compromise between the two political parties.
November housing starts are scheduled for release at 8:30 a.m. (1330 GMT). Economists in a Reuters survey forecast 873,000 housing starts in November versus 894,000 in October.
General Mills Inc (GIS.N) reported earnings that beat expectations and raised its full-year profit view, citing a recent acquisition which lifted sales.
Knight Capital Group (KCG.N) agreed to be sold to Getco Holding Company LLC in a deal valuing Knight at about $1.4 billion. Shares of Knight rose more than 6 percent in premarket trading before being halted.
Industrial machinery maker SPX Corp (SPW.N) is closing in on a roughly $4.2 billion deal to buy rival Gardner Denver Inc (GDI.N), as it makes progress in securing financing, a source familiar with the matter said on Tuesday.
(Editing by Bernadette Baum)