North American stock futures were up slightly ahead of the open on Tuesday, suggesting that markets could build upon the 1.6 per cent gain recorded in the U.S. by the S&P 500 on Monday.
But any investors hoping for smoother conditions risk being severely disappointed. Macroeconomic events continue to look unusually volatile. The Organization for Economic Co-operation and Development reduced its forecast for growth in the euro zone this year to a contraction of 0.1 per cent, down from its earlier forecast of plus 0.2 per cent. But it also increased its outlook for U.S. GDP to 2.4 per cent, up from just 2 per cent. The OECD also warned that the global recovery remains extremely fragile and uneven and could be derailed by the debt crisis in Europe.
Overseas markets seem to have received a jolt of confidence from news that Germany and France will work to keep Greece within the euro zone and that China is taking steps to spur its economic growth.
China’s Hang Seng index up 0.6 per cent
Japan’s Nikkei 225 index up 1.1 per cent
London’s FTSE 100 index up 1 per cent
France’s CAC 40 up 1 per cent
Germany’s DAX index up 0.8 per cent
Spain’s IBEX 35 index up 0.7 per cent
Oil down 11 cents (U.S.) to $92.46 a barrel (June delivery)
Gold down 1 per cent to $1,576.57 an ounce
Copper down 0.5 per cent to $3.484 a pound (July delivery)
Canadian dollar flat at 98.36 U.S. cents
10:00 a.m. U.S. existing homes sales for April are expected to show a 2.9 per cent increase from March.
Stocks to watch:
Best Buy Co. reported a 25 per cent decline in earnings for the first quarter on Tuesday. Revenue climbed 2 per cent. Results exceeded expectations on the Street.
Dell Inc. reports after the close today. Analysts expect a decline in both sales and profit as the company continues to struggle in its shift to serve the enterprise market.