US STOCKS - Futures rise as oil trims gains, Lowe's beats
18 Agustus 2008 18:46:36 (GMT+07:00)
Provided by: Reuters News
* Oil backs off from earlier climb
* Lowe's beats profit estimates
* Geopolitical worry ebbs after Musharraf's resignation
By Ellis Mnyandu
NEW YORK, Aug 18 (Reuters) - U.S. stock index futures rose on Monday as oil
prices cut earlier gains and an easing of geopolitical concerns surrounding
Pakistan's leadership underpinned sentiment.
U.S. front-month crude backed off from an earlier $115.35 a barrel as supply
fears related to Tropical Storm Fay ebbed. The storm was set to miss of the
major offshore oil and gas production in the Gulf of Mexico. As of 5 a.m.
the storm was located over central Cuba moving north-northwest.
Stronger-than-expected profit from Lowe's Cos Inc <LOW.N> , the No. 2 U.S.
home improvement chain, also added to the positive tone. Lowe's reported a
lower second-quarter profit as consumers took on fewer big-ticket
remodelings during the housing slump, but the company still beat analysts'
estimates on profit and sales.
The resignation of Pakistan's beleaguered President Pervez Musharraf eased
worries of political turmoil in the nuclear-armed country. For details, see
[nSP251857].
"We were a little higher in oil prices earlier, and oil now seems to have
come off a little bit, which helps the tone," said Peter Cardillo, chief
market economist at Avalon Partners in New York. "The other positive is that
the geopolitical concerns we had last week are beginning to wane."
S&P 500 futures <SPc1> rose 4 points and were above fair value, a formula
that evaluates pricing by taking into account interest rates, dividends and
time to expiration on the contract.
Dow Jones industrial average futures <DJc1> climbed 34 points and Nasdaq 100
<NDc1> futures gained 10 points.
In housing-related news, the U.S. Treasury is increasingly likely to
recapitalize home finance providers Fannie Mae <FNM.N> and Freddie Mac
<FRE.N> in the months ahead on the taxpayer's dime, Barron's newspaper
reported in its Aug. 18 edition.
The weekly financial newspaper said that such a move could wipe out existing
holders of the agencies' common stock, with preferred shareholders and even
holders of the two entities' $19 billion of subordinated debt also suffering
losses. [nN17477836]
Musharraf, the former army chief and firm U.S. ally, has seen his popularity
slide over the past 18 months and has been isolated since his allies lost a
February election. He announced his resignation on Monday.
U.S. stocks ended mixed on Friday, with the Dow and S&P 500 rising as lower
oil prices lifted hopes of a consumer spending recovery, but the Nasdaq was
little changed.
(Editing by Kenneth Barry)
