Dow Futures Rise Ahead Of Housing Reports

LONDON — Stock index futures at 7am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open up by 0.11% this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open up 0.25%. CNN’s Fear & Greed Index has fallen back into fear, at 39, down from yesterday’s close of 47.

European stock markets were mixed this morning, following yesterday’s US sell-off, which saw the Dow Jones close down by almost 1.5%. At 7am ET, the FTSE 100 was down 0.17%, the DAX was down 0.27% and the CAC 40 was unchanged. A rebounding gold price saw London precious metal miners make big gains this morning, led by a 6.2% rise for Fresnillo and a 4.1% gain for Randgold Resources. In the eurozone, data published today showed that inflation remained unchanged at 1.6%, on an annualised basis.

In the US today, investors may continue to focus on economic reports, after yesterday’s better-than-expected jobless claims and home builders index reports. Today may provide further confirmation that the US housing market is returning to health; at 8.30am ET, July’s housing starts report is expected to show 915,000 new starts last month, up from 836,000 in June. Also at 8.30am, July’s building permits report is expected to show that the number of new permits issued rose to 953,000 in July, up from 918,000 in June.

Earnings news tends to be minimal on Fridays, but last night’s earnings reports may attract further attention. Applied Materials was down by 2.2% in after-hours trading last night after it posted quarterly results last night that missed analysts’ revenue forecasts and said that it expected sales to remain flat this quarter. Although Nordstrom reported second-quarter earnings of $0.93 per share, up from $0.75 per share for the same period last year, quarterly sales of $3.1bn missed expectations and the firm cut its full-year earnings per share outlook, leaving the shares down by 2.3% in after-hours trading last night.

Dell stock may also be actively traded today, after the PC maker reported a 72% drop in quarterly earnings after the markets closed last night. Dell is said to be slashing profit margins and discounting sales heavily, in order to maintain volumes. Dell’s share price remained unmoved after the results at $13.70, just below founder Michael Dell’s $13.75 buyout offer price.

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.