Higher open on tap for Russell
Small-cap stocks are expected to open higher today, boosted by solid earnings results from big-name financial and consumer companies and by another media report saying that a rate hike is not on the immediate horizon. The Russell 2000 (NYSE:IWM) was up about 0.5% in after-hours trading, and was expected to open near 744.50.
The momentum from overnight gains remained mostly intact despite an upward surprise on the Producer Price Index report, which came in at 1.4%, above the forecast for a rise of 1%. The “core” PPI, which excludes food and energy prices, was pegged at 0.2%, which matched the market’s forecast. The housing starts number was slightly below expectations, and at 975,000 units marked the worst figure since 1991. Building permits were also slightly below the forecast.
Although stock index futures managed to hold on to most of the overnight gains after the “hot” PPI figure and the soft housing starts report, the dollar did edge slightly lower against the euro after the numbers were released. Crude oil prices slipped below $133 dollars a barrel in overseas trading, which will allow investors to focus on other factors early this morning.
The market appears to be enthused by the talk that a rate hike has been set aside for now, and is also watching company results this morning. The news from Goldman Sachs (NYSE:GS) was perceived as a positive that could extend across the board to other banks, large and small. Goldman Sachs shares were up some 2.5% in after-hours trading ahead of the regular stock market open. Also overnight, Best Buy (NYSE:BBY) reported earnings and although the numbers weren’t gangbusters, Best Buy shares appeared set to open higher.
Looking at the chart picture, the market appears poised to test initial resistance near 745.50 early today. Above that point, the market once again faces the critical point at 750. If the market starts to wobble today, support will be at 735 and 731.
