U.S. Stock Futures Rise as BOJ Stimulus Unopposed at G-20

U.S. stock futures rose, signaling the Standard & Poor’s 500 Index will rebound from its biggest weekly drop in five months, as the Group of 20 finance ministers failed to oppose Japan’s monetary policies at a meeting.
Power-One Inc. soared 56 percent in early New York trading after ABB Ltd. agreed to buy the maker of solar-power inverters for about $1 billion. Eldorado Gold Corp. and Barrick Gold Corp. each gained more than 3 percent as the price of the precious metal rose. Caterpillar Inc. (CAT) fell 0.9 percent after cutting its revenue forecast for the year.
S&P 500 (SPX) futures expiring in June advanced 0.4 percent to 1,554 at 7:39 a.m. in New York. The equity gauge fell 2.1 percent last week, its biggest drop since November, as earnings from Bank of America Corp. and International Business Machines Corp. missed estimates and as China’s economy unexpectedly slowed. Contracts on the Dow Jones Industrial Average climbed 50 points, or 0.4 percent, to 14,520 today.
“It’s encouraging to see that there’s no resistance from the G-20 leaders to Japan’s monetary policies,” Veronika Pechlaner, who helps manage about $1.5 billion as investment manager at Jersey, Channel Islands-based Ashburton Ltd., said by phone. “Markets are taking that as a positive as they expect the trend in quantitative easing and yen weakness to continue.”

Japan’s Stimulus

At a meeting in Washington late on April 19, the Group of 20 finance chiefs didn’t oppose the Bank of Japan’s plan to buy more than 7 trillion yen ($70 billion) of bonds a month. The central bank’s Governor Haruhiko Kuroda said he would proceed with his campaign to end 15 years of deflation. The Bank of Japan (8301) aims to increase inflation to 2 percent within two years.
“Winning international understanding gives me more confidence to conduct monetary policy appropriately,” Kuroda told reporters after the meeting. “We will continue our qualitative and quantitative easing for the next two years.”
In the U.S., sales of previously owned houses rose for a third month in March, economists said before a National Association of Realtors report at 10 a.m. in Washington. Sales increased to a 5 million annualized rate, from 4.98 million in February, according to a Bloomberg survey of economists. That would be the highest number since November 2009.
Eight S&P 500 companies including Netflix Inc. and Texas Instruments Inc. post their quarterly earnings today. Of the 103 that have reported so far, 72 percent have exceeded analysts’ predictions for earnings, data compiled by Bloomberg show. Profit at S&P 500 companies dropped 1.1 percent in the first three months of the year, according to forecasts compiled by Bloomberg. That would mark the first year-over-year decrease since 2009.

Stocks Rally

The S&P 500 has surged 130 percent from a 12-year low in 2009 as the Federal Reserve embarked on three rounds of bond purchases to stimulate the economy.
The gains in U.S. consumer stocks, combined with a retreat by global equities this month, have made American companies the five biggest in the world for the first time in eight years. Exxon Mobil Corp., Apple Inc., Google Inc., Berkshire Hathaway Inc. and Wal-Mart Stores Inc. are now the largest by market value, according to data compiled by Bloomberg.
Power-One surged 56 percent to $6.29 after ABB (ABBN), the world’s biggest builder of electricity networks, said it will buy the company for about $6.35 a share. The price is 7.7 times Power- One’s earnings before interest, taxes, depreciation and amortization, according to data compiled by Bloomberg.

Gold Stocks

Eldorado Gold Corp., a Canadian producer with mines in China and Greece, rallied 3.4 percent to $7.29 as the price of the precious metal climbed for a fifth day, its longest rally this year.
Barrick Gold Corp., the biggest producer by sales, climbed 3.2 percent to $18.76 in early New York trading.
Caterpillar dropped 0.9 percent to $79.73. The world’s largest maker of mining and construction equipment forecast revenue of $57 billion to $61 billion for this year. The company had predicted sales of $60 billion to $68 billion in its previous estimate.
B/E Aerospace Inc. may be active after posting first- quarter earnings of 87 cents a share, exceeding the average analyst estimate of 81 cents.
“The company expects continued strong bookings in 2013,” the maker of cabin interiors for commercial aircraft said in a statement.