As a new month begins, investors cheered a U.S. debt agreement that was announced Sunday. Congress is expected to vote on the deal today.
Wall Street futures zoomed sharply higher on news that a default would be avoided, although some analysts are still fretting about a possible credit rating downgrade. Politicians are still arguing over the deal, with many saying they will oppose it, but global markets welcomed the news.
Asian stocks ended Monday's session with gains. Financials and manufacturers rose in Japanese trade. However, banks were among the biggest decliners in Shanghai, which eked out only a fractional gain.
Europe shrugged off its own debt worries Monday, with investors also applauding news from the U.S. Financial stocks rallied in European trade. The London-listed shares of HSBC (HBC) gained on news that it would sell cut a total of 30,000 jobs worldwide, and sell 195 retail branches in upstate New York to Buffalo-based First Niagara Financial Group (FNFG). HSBC's U.S.-listed shares rose $1.86, 3.81%, to $50.73 in the premarket.
The euro moved higher against the dollar early Monday. Gold pulled back early Monday, shedding $10.30 per ounce to $1,620.90. Crude prices rose $1.25 to $96.95 per barrel in early Nymex trade.
Economic news today includes the Institute for Supply Management's (ISM) report for July. The survey of purchasing managers is expected to show a slight decline to 55 from June's reading of 55.3. The survey results are due out at 10 a.m. EDT.
Also expected today is the Commerce Department's report on construction spending for June. Economists are calling for an increase of 0.1%. These data are also set for release at 10 a.m.
In earnings news, insurer Allstate (ALL) posted a second-quarter loss of $1.23 per share on losses due to catastrophes, which included tornadoes, hailstorms and wildfires. Shares had already been tanking, with a 9.2% decline for July.
Catastrophe losses also hit Loews (L), which missed its second-quarter earnings expectations. The company reported net income of $0.62 per share, vs. expectations of $0.74 per share. Lowe's shares gained $0.25, 0.63%, to $40.12 in premarket trade.
Health maintenance organization Humana (HUM) beat second-quarter views and raised its full-year earnings outlook. Profit came in at $2.71 per share on revenue of $9.28 billion. The company cited enrollment gains in its Medicare plans, and lower usage of services by members as boosting the results. Humana shares advanced $4.10, 5.5%, to $78.68 ahead of the opening bell.
Other premarket movers included Frontier Communications (FTR), which provides telecom services to rural communities. While many investors dismiss the stock because it trades in the single digits, it has a dividend yield of 10%. The company is set to report its second-quarter results on Wednesday, with Wall Street expecting net income of $0.06 per share. Ahead of Monday's open, shares advanced $0.06, 0.80%, to $7.55.
DJIA component Johnson & Johnson (JNJ) fell $0.79, 1.22%, to $64 in the premarket. Shares fell 2.9% last week along with the decline in the general market. On July 19, the company maker of pharmaceuticals and consumer health care products reported better-than-expected second-quarter results.
Beaten and battered F5 Networks (FFIV) jumped $1.21, 1.29%, to $94.69 in early trade. The stock gapped down 11.3% on July 21 following a third-quarter outlook that was essentially in line with views.
Fellow tech Salesforce.com (CRM) bolted $5.19, 3.59%, to $149.90 ahead of the bell. Shares fell below their 10-week average in the broader market selloff last week. However, selling in Salesforce.com came in below-average volume, a sign that there was no mass exodus from the stock.
Analyst actions ahead of the bell, another cloud-computing company, EMC (EMC), jumped on an Oppenheimer upgrade to Outperform from Perform. Shares climbed $0.57, 2.19%, to $26.65 in early trade.
Jazz Pharmaceuticals (JAZZ), a small-cap that has been a growth juggernaut in recent months, was upgraded to Buy from Hold at Jefferies. Apparently, investors hadn't been waiting for the Jefferies OK, sending the stock's price up 105.64% so far this year.
Goldman Sachs upgraded RadioShack (RSH) to Conviction Buy from Neutral, citing an expected improvement in earnings trends. Goldman also said the retailer's addition of wireless carrier Verizon (VZ) should boost results. The company's year-over-year earnings have declined in the past three quarters. RadioShack shares rose $0.78, 5.6%, to $14.70 in premarket trade.