U.S. To Open Higher, Sights Set on Record Highs

by: SA Editors

At 8:30 AM EDT:

U.S. Futures

S&P 500: +2.50; 1,339.00
NASDAQ: +6.00; 1,669.75
DOW: +23.00; 11,720.00 0.20

International Indexes

NIKKEI 225: +0.74%; 15,834.23 (+115.56)
HANG SENG: +0.61%; 17,619.97 (+107.01)
S&P/ASX 200: -0.05%; 4,995.90 (-2.60)
BSE SENSEX 30: +1.36%; 12,274.27 (+165.13)

FTSE 100: +0.47%; 5,894.00 (+27.80)
CAC 40: +0.44%; 5,215.82 (+23.08)
XETRA-DAX: +0.16%; 5,963.65 (+9.27)

Commodity Futures (Reuters/Jefferies CRB)

Oil: +0.59%; $61.10 (+$0.36)
Gold: +0.17%; $587.70 (+$1.00)
Natural Gas: -3.20%; $4.77 (-$0.16)
Silver: +0.27%; $11.17 (+$0.03)

Asian Headlines (via Bloomberg.com)

Thai Stocks Drop in First Trading Since Military Coup; Shin Corp. Plunges Thai stocks fell to two-month lows before recovering in the first day of trading since a military coup ousted Prime Minister Thaksin Shinawatra. Shares of Shin Corp., linked to Thaksin, and its units declined.

Singapore Telecom Names Chua Chief Executive as Lee Hsien Yang Steps Down Singapore Telecommunications Ltd. named finance head Chua Sock Koong as chief executive officer, banking on a 17-year veteran with experience in regional expansion to stem slowing sales growth. The stock posted its biggest gain in two months.

Asian Shares Rise on Oil, Interest Rates; Toyota Gains, Thai Stocks Fall Asian stocks rose, led by exporters such as Toyota Motor Corp. (NYSE:TM) and Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) after oil traded below $60 a barrel and the U.S. Federal Reserve signaled it may have finished raising interest rates.

Principal Financial Chief Zimpleman Says Asia to Help Drive Global Profit Principal Financial Group Inc. (NYSE:PFG), a U.S. seller of insurance and retirement plans, will target Asia in an attempt to boost earnings outside its home market, President Larry Zimpleman said.

Tsingtao Brewery Shares Rise in China on Minority Investor Compensation Shares of Tsingtao Brewery Co. surged in Shanghai after the parent of China's largest beer maker increased its compensation offer to minority investors by a third in exchange for making all the company's shares tradable.

European Headlines (via Bloomberg.com)

Merck KGaA to Buy Serono for $13.3 Billion After Losing Schering to Bayer Merck KGaA (NYSE:MRK), the German drug maker that lost a bid for rival Schering AG (SHR) this year, agreed to buy Switzerland's Serono SA (SRA) for 16.6 billion francs ($13.3 billion) to become Europe's largest biotechnology company.

European Stocks Rise on Merger Speculation, Led by Merck; Ciba Shares Gain European stocks rallied, approaching a four-month high, after Merck KGaA's (MRK) $13.3 billion offer for Serono SA (SRA) ignited speculation of more takeovers in the region.

CVC Capital Partners Seeks $5.1 Billion for New Fund, People Familiar Say CVC Capital Partners Ltd., the buyout firm that owns Formula One motor racing, is seeking about 4 billion euros ($5.1 billion) from investors for a private equity fund, two people with knowledge of the plan said.

Airbus, Trailing Boeing, Delays Superjumbo for Second Time in Three Months Airbus SAS delayed its A380 superjumbo for a second time in three months as the European plane maker struggles to install the wiring on the aircraft, raising the likelihood of additional cost overruns.

Zurich Financial Shares Rise on Report of Merger With St. Paul Travelers Shares of Zurich Financial Services AG rose after the Swiss newspaper Cash reported that St. Paul Travelers Cos. (STA) may announce a merger with Switzerland's largest insurer in November.

U.S. Headlines (via Bloomberg.com)

Amaranth Says Losses Swell to $6 Billion After Transferring Energy Trades Amaranth Advisors LLC, the hedge- fund company that imploded after wrong-way bets on natural gas, said losses swelled by $1.4 billion this week because the firm had to unload assets at a discount to avoid a shutdown.

Stock Futures Rise Before Economic Reports; Exxon Mobil, Alcoa Shares Gain U.S. stock-index futures rose before reports that won't give the Federal Reserve more reason to keep raising borrowing costs, fueling speculation earnings will grow.

FedEx Net Rises 40 Percent as China's Exports Grow; Sales Climb 11 Percent FedEx Corp. (NYSE:FDX), the world's largest cargo airline, said its fiscal first-quarter profit rose 40 percent on rising exports from China and expanding economies.

Dollar Declines on Expectations Reports Will Show Slowing Economic Growth The dollar declined on concern reports today will highlight slower growth in the U.S. economy, supporting the Federal Reserve's decision to keep its main interest rate on hold for the second straight month.

Hospira Agrees to Acquire Australia's Mayne Pharma for $2 Billion in Cash Hospira Inc. (NYSE:HSP), the hospital supply company spun off from Abbott Laboratories (NYSE:ABT), agreed to buy Mayne Pharma Ltd. for A$2.6 billion ($2 billion) in cash to become the world's biggest maker of generic injectable drugs.

Immigrant Demand Offers Rare Bright Spot for Slumping U.S. Housing Market Thirteen years after fleeing El Salvador's civil war, Ana Chicas realized the American dream, buying a home in the Washington, D.C., suburbs this year. Pent-up demand from immigrants like her is providing a rare bright spot for the gasping U.S. housing market.

U.S. Wake Up Call (via Briefing.com)


Yesterday's positive showing looks likely to continue when the session begins as both the S&P 500 and Nasdaq 100 futures are trading above fair value.

There isn't a specific news catalyst this morning to account for the bullish bias. Rather, it seems to be a function of the market's upside momentum that has been fueled by the belief that the Fed is done raising interest rates and that the desired soft landing scenario will be achieved. Briefing.com isn't forecasting another rate hike, but we believe the market is under-estimating the risk that the Fed could raise again.

Oil prices are trading modestly higher with round-number support (i.e. $60) playing a role in attracting some speculative buying interest.

On the earnings front, General Mills (NYSE:GIS) topped quarterly estimates by $0.07 and provided in-line guidance for the full-year. We are still waiting to hear from FedEx (FDX), ConAgra (NYSE:CAG) and Carnival (NYSE:CCL), which are due to report before the open. Nike (NYSE:NKE) and Palm (PALM), meanwhile, will headline the after hours session with their earnings reports.

Today's economic calendar features the weekly initial claims, leading indicators, and Philadelphia Fed Index reports. None of them are expected to have any significant market-moving impact.

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