U.S. Index Futures Little Changed With S&P 500, Dow Near Records

By Sofia Horta e Costa

U.S. stock-index futures were little changed, with equities near all-time highs, before reports on spending, home sales and durable-goods orders that may provide evidence that the economic recovery is on track.
Contracts on the Standard & Poor’s 500 Index (SPX) added 0.1 percent to 2,069.6 at 7:23 a.m. in New York. The S&P 500 has rallied 11 percent from its low last month, closing at a third straight record on Nov. 24, as data signaled the U.S. economy is improving and central banks in Europe, Japan and China added more stimulus measures. The equity benchmark is heading for its second monthly gain.
Dow Jones Industrial Average contracts rose 12 points, or 0.1 percent, to 17,820 today. U.S. markets will be closed tomorrow for the Thanksgiving holiday.
“Today’s data, as well as the amount consumers choose to spend this Thanksgiving weekend, will give us a good indication of how the real U.S. economy is
holding up,” said Steven Santos, a broker at X-Trade Brokers DM SA in Lisbon. “There’s a real chance that the S&P 500 will repeat the December rally again, and people are looking to put more risk on the table as we get to the end of the year. You don’t want to miss out.”
The S&P 500 has rallied each December for the past six years.
Investors are watching U.S. data to gauge whether the world’s largest economy can lead a rebound in global growth. A Commerce Department report at 8:30 a.m. in Washington will show orders for durable goods declined a third month in October, economists predicted. Separate reports may show consumer spending and incomes rose last month, and sales of new American homes advanced at a faster pace.

High Valuations

The rally in American equities has pushed stock valuations to near the highest levels since 2009. The S&P 500 trades at 17.2 times the projected earnings of its members, up from a multiple of 15.5 last month. Profit for S&P 500 companies may rise 7.6 percent this year, estimates compiled by Bloomberg show.
Calm has returned to equity markets. The Chicago Board Options Exchange Volatility Index, the gauge of options prices known as the VIX, has dropped 12 percent in the past four days to a two-month low. The benchmark gauge of price swings surged to a more than two-year high on Oct. 15.
Among stocks moving on corporate news today, Hewlett-Packard Co. slipped 1.9 percent to $36.92 in early New York trading after the computer maker reported fourth-quarter sales that missed estimates. The shares rallied 34 percent this year through yesterday.
Deere & Co. dropped 2.2 percent to $85.90. The world’s largest maker of farming equipment said 2015 profit will probably be $1.9 billion, less than the $2.2 billion average analyst projection compiled by Bloomberg.
Hertz Global Holdings Inc. added 1.5 percent to $25.62. Icahn Associates Corp., controlled by billionaire activist investor Carl Icahn, increased its stake in the car rental company to about 11 percent, according to a filing. Icahn held a 8.7 percent stake in Hertz as of Sept. 30.
Analog Devices Inc., a maker of semiconductors, gained 1.2 percent to $52.31 in German trading after profit and sales for the fourth quarter exceeded projections. The company’s adjusted gross margin, a measure of profitability, was also wider than analysts had predicted.