Dow May Deliver Early Gains


LONDON -- Stock index futures as of 8:20 a.m. EST suggest that both the Dow Jones Industrial Average and the S&P 500 may rise by 0.23% when trading starts.

Today's session is likely to be influenced by ongoing speculation on the outcome of fiscal-cliff negotiations and this week's Federal Open Markets Committee meeting. As in Europe, investor confidence may receive a boost from the news that the German ZEW economic sentiment index rose to 6.9 in December, up from -15.7 in November and substantially higher than the -11.5 forecast. This is the first positive reading since May and suggests that Europe's largest and most healthy economy may not be heading into recession after all.

At home, today's economic releases include November's NFIB small-business index, which was released at 7:30 a.m. The optimism gauge dropped from October's 93.1 to 87.5 -- far below analyst estimates of 92.5 and its lowest level in nearly three years. Analysts expect October's trade deficit, due at 8:30 a.m. EST, to have widened from $41.5 billion to $42.1 billion. Finally, October's wholesale inventories and job opening statistics are due at 10 a.m. EST.

In corporate news, Dollar General is due to release its quarterly results. Other companies whose shares could see active trading include Texas Instruments, which announced major cost-cutting measures yesterday, and AIG, after the Treasury announced on Monday that it would sell off its remaining shares in the insurer. The sale is expected to yield a further profit for taxpayers in addition to the $15 billion gain the Treasury and Federal Reserve have booked from the AIG rescue to date. Apple may also rise after Morgan Stanley reiterated its overweight rating for the iPhone maker.

European markets
After falling yesterday over fears that the resignation of Italian Prime Minister Mario Monti could derail Italy's austerity program, European markets have stabilized today, helped by the ZEW survey results from Germany. At 8:20 a.m. EST, the DAX was up 0.57%, the CAC 40 was up 0.75%, the FTSE MIB was up 1.1%, and the IBEX 35 was up 0.87%.

In London, the FTSE 100 was up 0.11%. Hotel and pub chain Whitbread was the biggest winner of the morning, up 3.6% following a strong set of results. Miner BHP Billiton also made strong gains, rising 1.5% on strong volume after broker Nomura reiterated its buy recommendation and highlighted the firm as its pick of the global miners.

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