Stock futures climb after better-than-expected earnings from Intel and JPMorgan Chase

By Stephen Bernard, AP
Wednesday, April 14, 2010

Stock futures rise after Intel, JPMorgan results

NEW YORK — Stock futures are rising Wednesday after Intel Corp.’s quarterly results showed companies are starting to spend again on technology.

Increased corporate spending provides further evidence the economy is slowly, but steadily recovering. Stocks have been rising in recent months on encouraging signs of growth.

JPMorgan Chase & Co. reported a better-than-expected profit as well. The bank is still facing big losses from failed consumer loans, but CEO Jamie Dimon said there have been clear improvements in the economy.

Stock futures extended their gains after government reports showed consumers are ramping up their spending and inflation remains tame.

Intel’s first-quarter results easily topped expectations, providing hopes that technology spending is picking up and will help drive economic growth. Just as important, the technology company said its profit margin will be better than previously estimated in 2010 and it plans to hire 1,000 new workers.

Strength at JPMorgan Chase’s investment bank helped offset losses from consumer loan defaults and propelled the company’s profit above analyst expectations. Like Intel, JPMorgan said it plans to ramp up hiring this year. The bank plans to add 9,000 employees in the U.S.

High unemployment and spending remain two of the major hurdles to a strong, sustained economic rebound.

Ahead of the opening bell, Dow Jones industrial average futures rose 43, or 0.4 percent, to 11,006. Standard & Poor’s 500 index futures rose 5.50, or 0.5 percent, to 1,198.60, while Nasdaq 100 index futures rose 13.75, or 0.7 percent, to 2,015.00.

Intel shares jumped $1.09, or 4.8 percent, to $23.86 in premarket trading. JPMorgan shares rose $1.50, or 3.3 percent, to $47.37.

The strong earnings come at the same time the government is also releasing data that shows the economy is improving. The Commerce Department said retail sales rose 1.6 percent in March, the third consecutive month of growth.

Economists polled by Thomson Reuters had forecast sales would rise 1.2 percent last month.

A separate report from the Labor Department showed inflation remained benign last month. The Consumer Price Index, a measure of inflation at the retail level, rose 0.1 percent in March. That was in line with economists’ forecast.

The Fed has repeatedly said that inflation is not a problem and has been able to keep its key interest rates low because of a lack of inflation. The Fed has kept rates low to help stimulate the economy.

Stocks advanced Tuesday, with the Dow pushing further above 11,000. It rose about 13 points as expectations grew that earnings in the coming weeks would show the economy is improving. Stocks initially dipped on disappointing results from Alcoa Inc.

Meanwhile, bond prices rose slightly Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged at 3.82 percent compared with late Tuesday.

The dollar fell against other major currencies, while gold and oil rose.

Overseas, Japan’s Nikkei stock average rose 0.4 percent. Britain’s FTSE 100 gained 0.9 percent, Germany’s DAX index rose 1 percent, and France’s CAC-40 climbed 0.9 percent.

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