U.S. Stock-Index Futures Rise; S&P 500 Poised to Reverse Slump

By Adam Haigh

Jan. 25 (Bloomberg) -- U.S. stock-index futures gained amid signs Ben S. Bernanke will be confirmed as Federal Reserve chairman for a second term, indicating the Standard & Poor’s 500 Index will rebound from its biggest three-day decline since the rally began in March.

Intel Corp. gained 1.6 percent after Barron’s reported the world’s largest chipmaker may surge 25 percent in the next few years as consumers and businesses replace their older computers with new machines.

Futures on the S&P 500 expiring in March advanced 1 percent to 1,101.9 as of 6:46 a.m. in New York. The S&P 500 is up more than 60 percent since March as governments worldwide pledged more than $12 trillion to revive the economy. Dow Jones Industrial Average futures gained 0.9 percent to 10,241 today and Nasdaq-100 Index futures added 0.7 percent to 1,809.5.

“We expect the U.S. market to perform well in 2010 as the extreme policy measures implemented by the U.S. administration bear fruit,” said Ian Scott, chief global equity strategist at Nomura Holdings Inc. in London. “The asset allocation position should also be very supportive for equities as both households and institutions are holding relatively large amounts in cash.”

U.S. equity benchmark indexes have slipped for three days as President Barack Obama called for a limit on risk-taking by banks and concern mounted that China will take measures to stem economic growth. Futures contracts indicated indexes will snap these losses today when the equity market opens after Obama received assurances from Senate leaders that Bernanke will be confirmed for a second term as Fed chairman. Bernanke’s term expires Jan. 31.

Fed, Home Sales

Fed officials will keep interest rates near zero after their two-day meeting this week, economists forecast in a Bloomberg survey.

Sales of existing homes probably fell in December, the month after a government tax credit was originally due to expire, economists said before a report set for 10 a.m. in Washington. Purchases dropped to a 5.9 million annual rate from a 6.54 million pace in November, marking the first decrease in four months, according to the median of 57 economists surveyed by Bloomberg News.

Eaton Corp. and Halliburton Co. are among companies reporting fourth-quarter results today. A record nine-quarter earnings slump is projected to have ended in the fourth quarter with a 73 percent increase in S&P 500 profits. More than 130 companies in the index are scheduled to release results this week, including Apple Inc., 3M Co. and Microsoft Corp.

Intel

Intel gained 1.6 percent to $20.23 in pre-market New York trading. Intel may benefit from an upgrade cycle with the availability of the Windows 7 operating system, as well as the introduction of new chips such as Sandy Bridge, which combines microprocessing and a memory controller with graphics capability, the weekly newspaper said in its Jan. 25 edition. The article did not specify a time period for the possible rally.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.