US futures flat ahead of data

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New York - US stock index futures were flat on Wednesday as investors digested recent gains and awaited key US economic data, though Amazon and Boeing both rose after earnings topped expectations.

Equities have soared in recent weeks, with the S&P 500 rising for nine of the past 10 sessions. The Dow Jones industrial average has been flirting with 14,000, a level it hasn't seen since October 2007. Many analysts have said markets may need to take a pause at current levels.

The first read on US fourth-quarter economic growth is due at 8:30 a.m. (15:30 SA time) Analysts see a 1.1 percent annualized pace of growth in GDP, down from the 3.1 percent in the third quarter.

“I wouldn't read too much into the slowing from the third quarter, since that was impacted by (superstorm) Sandy and the fiscal cliff. The momentum in the data has been strong, which could be enough to keep us grinding higher,” said John Brady, managing director at R.J. O'Brien & Associates in Chicago.

Traders will also look to the January ADP employment report, which is expected to show 165,000 private-sector jobs were created in the month, down from 215,000 in December. The report precedes the closely watched nonfarm payroll report on Friday, which is expected to show modest but steady job growth.

Amazon.com Inc was the latest high-profile name to rally after results, rising 8.8 percent to $283.30 in premarket trading a day after the online retailer reported better-than-expected fourth-quarter earnings and strong revenue growth. The rally put the stock within striking distance of an all-time high.

Boeing Co rose 1 percent to $74.35 before the bell after reporting adjusted fourth-quarter earnings that beat expectations. The Dow component also said that while production continued on its Dreamliner segment, which has had technical problems recently, it was suspending delivery until clearance was granted by the Federal Aviation Administration.

Thomson Reuters data showed that of the 174 companies in the S&P 500 that have reported earnings this season, 68.4 percent have been above analyst expectations, which is a higher proportion than over the past four quarters and above the average since 1994.

S&P 500 futures fell 0.7 point but remained above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures were flat and Nasdaq 100 futures rose 2 points.

The S&P has been hovering around 1,500, a level market technicians say is an inflection point that will determine the overall direction in the near term. The benchmark index is on track to post its best monthly performance since October 2011 as investors poured $55 billion in new cash into stock mutual funds and exchange-traded funds in January, the biggest monthly inflow on record.

The Federal Reserve concludes a two-day meeting on Wednesday, and while the central bank is expected to keep monetary policy on a steady path, intensive debates continue behind the scenes over when the controversial bond-buying program should be curtailed.

In company news, Chesapeake Energy Corp rose 10.5 percent to $20.95 in premarket trading a day after saying Aubrey McClendon would step down as chief executive after a year in which a series of Reuters investigations triggered civil and criminal probes of the second-largest US natural gas producer.

US stocks advanced on Tuesday, led by defensive sectors, in a sign the cash piles recently moving into the market are being put to use by cautious investors to pick up more gains. - Reuters


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