Adam Sarhan MarketWatch.com Quote: U.S. stock futures higher ahead of housing starts
Dec. 19, 2012, 7:26 a.m. EST
Global optimism: Japan’s Nikkei busts through 10,000 level
MADRID (MarketWatch) — U.S. stock futures pointed to a potential third consecutive session of gains for Wall Street on Wednesday, again driven by hopes for a deal over the fiscal cliff, while housing-starts data will offer up another clue on the state of the economy.
Futures for the Dow Jones Industrial Average (CBE:DJH3) rose 35 points to 13,311, while those for the Standard & Poor’s 500 index (GLC:SPH3) rose 3.1 points to 1,444.
Futures for the Nasdaq 100 index (CME:NDH3) rose 9.5 points to 2,711.
Economists surveyed by MarketWatch expect the annualized rate of housing starts — due for release at 8:30 a.m. Eastern time — dropped to 865,000 in November from 894,000 in October, largely due to fallout from Hurricane Sandy.
Also, the volatile multifamily category, which has seen big gains in recent months, is expected to show a decline. The Tell: What to watch on the U.S. economy on Wednesday
Wall Street extended stocks into a second session the prior day, on signs of progress on Capitol Hill. The Dow Jones Industrial Average (DJI:DJIA) logged its second-straight triple-digit rise, closing up 115.57 points, or 0.9%, to 13,350.96.Read: Stocks lifted by hopes of fiscal-cliff deal
“The market is in an upward trend that began about a month ago when DC began the hint that a deal would get done for a fiscal cliff,” said Adam Sarhan, founder and chief executive officer of New York-based Sarhan Capital. He said the low for this trend was Nov. 16, but since then, markets have been steadily trotting higher on deal optimism.
He added that upbeat economic data, such as for jobless levels and the housing market, are also helping those gains along.
“I would say as long as the market continues acting well, I don’t see a reason to prematurely get out in fear of them missing a deadline,” Sarhan said.
“From where we are now, it looks like the next level for the S&P 500 (SNC:SPX) is 1,475, the high of the year that we reached in September,” he said.
On Tuesday, House Speaker John Boehner floated a so-called Plan B to increase taxes on incomes of $1 million and above, which immediately met opposition by the White House and Senate Democratic Leader Harry Reid. Read: Boehner floats ‘Plan B’ as cliff deadline nears
“For the time being, markets are seemingly ignoring Boehner’s ‘Plan B’ as more of a tactical maneuver, perhaps seeing it as a way for Republicans to pass blame on the Democrats if the bill fails to pass the Senate. Indeed, overnight markets are trading stronger, helped by the strong lead-in from the U.S.,” said analysts at Deutsche Bank in a note.
Japan’s Nikkei 225 index (TYO:JP:100000018) busted past the key 10,000 mark for the first time in eight months, driven in part by U.S. budget-talk optimism. Read: Japan’s Nikkei sails over 10,000, leads Asia
Global gains continued in Europe, where the Stoxx Europe 600 (STX:XX:SXXP) rose 0.5%.
In other markets, gold and oil were also moderately higher, while the dollar drifted lower on continued optimism over the U.S. fiscal cliff. The dollar index (NYE:DXY) fell to 79.142 from 79.349 in North American trade late Tuesday. Read: Big earnings Wednesday: FedEx, Bed Bath & Beyond .
Also The Tell: Barclays bullish on oil-services sector for 2013 and beyond