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Dow May Open Higher As Stocks Rebound

LONDON — Stock index futures at 7am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open up by 0.34% this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open up 0.36%. The CNN Fear & Greed Index is set to open at 46, or ‘neutral’, after closing at 54 yesterday.

After a downbeat few days, European markets turned upwards this morning and have made modest gains so far. Sentiment was helped by overnight news that Chinese exports rose by 5.1% in July, while imports rose by 10.9%. German exports also rose by 0.6% in June, compared to May. Markets also received a boost from the European Central Bank, which said, in its latest monthly bulletin, that its “monetary policy stance will remain accommodative for as long as necessary”, stemming fears that will attempt to raise interest rates in the foreseeable future. At 7am ET, the FTSE 100 was up 0.50%, the DAX was up 0.67% and the CAC 40 was up 0.62%.

In the US today, the latest weekly jobless claims figures will be published at 8.30am ET. Analysts’ consensus forecasts indicate that 339,000 new unemployment claims may have been made last week, up slightly from 326,000 claims during the previous week.

In corporate news, electric utility AES reported second-quarter adjusted earnings of $0.32 per share and reaffirmed its full-year guidance for the year, despite citing “significant headwinds” in Latin America. Other companies due to report before the opening bell this morning include Dean Foods, Scripps Networks Interactive, Beam and NVIDIA, along with Hillshire Brands. Amongst those due to report after the close tonight is Priceline.com, which analysts expect to report second-quarter earnings of $9.38 per share on revenue of $1.65bn.

Tesla stock may also be in demand when markets open. After rising by 208% during the second quarter and by 296% so far this year, Tesla stock was up by a further 14% in pre-market trading this morning, after the electric car company beat analysts’ expectations last night with second-quarter adjusted profit of $0.20 per share. Analysts had been expecting a quarterly loss of $0.17 per share. Groupon (NASDAQ: GRPN.US) may also rise when markets open — the stock gained 22% in pre-market trading this morning after the firm reported a 7.1% increase in second-quarter sales and a reduced net loss.

Finally, let’s not forget the Dow’s daily movements can add up to some serious long-term gains. Indeed, Warren Buffett recently wrote: “The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions.

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> Roland does not own shares in any of the companies mentioned in this article.