Markets Poised for Gains on Japanese QE


LONDON -- The Dow Jones Industrial Average (INDEX: ^DJI) and the S&P 500 (INDEX: ^GSPC) are expected to open slightly higher this morning, according to futures markets at 7 a.m. EDT. Investors are expected to react favorably to overnight news that Japan's central bank has launched a $126 billion extension to its existing asset-purchase program. The money will be used to buy a mixture of short- and long-dated government bonds and will run until the end of 2013.

At home, a range of housing-related data is due to be released, which could confirm the improvement shown by yesterday's homebuilders' index. The MBA weekly mortgage applications survey was due at 7 a.m. EDT. August's housing start figures are to be released at 8:30 a.m. EDT; analysts are expecting an increase from 746,000 to 775,000, but building permits, also due at 8:30 a.m. EDT, are expected to have fallen. Finally, August's existing-home sales are due at 10 a.m. EDT, with analysts expecting an increase from 4.47 million to 4.6 million.

Today sees a pickup in company reporting activity, with General Mills, AutoZone, Adobe Systems, and Bed Bath & Beyond all expected to report quarterly figures. It may also be worth watching out for Microsoft, which announced a 15% increase in the company's quarterly dividend after markets closed last night.

European markets
Over in Europe, the main markets were almost unchanged after the morning's trading. At 7 a.m. EDT, the DAX was down 0.1%, the CACwas down 0.1%, the FTSE MIB was down 0.2%, and the IBEX was down 0.1%. In London, the FTSE 100 (INDEX: ^FTSE) was up 0.1%, as the gainers and fallers almost balanced each other exactly. Leading the gainers and continuing yesterday's ascent was water utility United Utilities, which rose by 2.7% on the strength of renewed bid rumors. At the other end of the scale, financials continued to suffer, with Barclays falling 2.2% and yesterday's big loser, Aviva, sliding a further 1.2%.

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Roland Head owns shares in Aviva but has no shares in any of the other companies mentioned in this article. Motley Fool newsletter services have recommended buying shares of Microsoft, Bed Bath & Beyond, and Adobe Systems. Motley Fool newsletter services have recommended creating a synthetic covered call position in Microsoft. Motley Fool newsletter services have recommended creating a diagonal call position in Adobe Systems. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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