Stocks set for modest gains after Apple tops forecasts; investors await Bernanke testimony

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Stock futures climb after upbeat Apple results

NEW YORK — Stock futures rose modestly Wednesday as investors focus more on an upbeat earnings report from Apple than disappointing results from Yahoo.

Traders are trying to get a read on the economy through companies’ profit reports, but earnings have been mixed over the past week, which has led to volatile trading. Profit is mostly improving, but sales are not growing fast enough at some companies to reassure investors the recovery is picking up steam.

More certainty about the health of the economy could come from testimony by Federal Reserve chairman Ben Bernanke. He is scheduled to begin two days of testimony on Capitol Hill Wednesday to discuss the Fed’s view on the strength of the economy. Bernanke is likely to say the economy isn’t headed back into recession, but he is also expected to be cautious in his optimism for near-term growth. Bernanke will likely repeat a pledge that the Fed will provide any support needed to further boost the recovery.

Apple Inc. easily topped profit forecasts and, more importantly, raised its revenue guidance above analysts’ expectations when it released quarterly results after the market closed Tuesday.

Strong revenue is considered the most important part of quarterly results so far because of how closely it’s tied to the economy’s health. Quite simply, strong revenue forecasts mean companies are optimistic that business will pick up. Stronger business could get corporations to start ramping up hiring again to meet the higher sales demands.

High unemployment and sluggish sales are considered two of the primary reasons the recovery is slow.

Yahoo, on the other hand, was hurt by weak revenue growth. The Internet company, which derives much of its revenue from online advertising, came up well short of the growth seen by its biggest competitor, Google Inc. The disappointment in revenue overshadowed big gains in profit, which were helped by cost cutting.

Ahead of the opening bell, Dow Jones industrial average futures rose 7, or 0.1 percent, to 10,185. Standard & Poor’s 500 index futures rose 1.60, or 0.2 percent, to 1,081.70, while Nasdaq 100 index futures rose 13.50, 0.7 percent, 1,853.25.

Apple shares jumped $8.59, or 3.4 percent, to $260.48 in pre-opening trading. Yahoo fell $1.00, or 6.6 percent, to $14.20.

Another batch of earnings is due throughout Wednesday that will provide further insight into the potential pace of recovery. Three big banks — Morgan Stanley, Wells Fargo & Co. and US Bancorp — all report results. Coca-Cola Co., Starbucks Corp. and eBay Inc. also release earnings.

Stocks are trying to extend their winning streak into a third day. The Dow rose Tuesday by more than 75 points after falling nearly 150 points early in the morning.

Meanwhile, bond prices inched higher Wednesday, meaning some investors are still seeking safety in Treasurys and avoiding the volatile stock market. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.95 percent from 2.96 percent late Tuesday.

Overseas, Britain’s FTSE 100 rose 1.4 percent, Germany’s DAX index rose 1.2 percent, and France’s CAC-40 gained 1.8 percent. Japan’s Nikkei stock average fell 0.2 percent.