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Jul 12, 2016

U.S. Stock Market Future Indications, by MarketWatch - July 12, 2016: S&P 500 Set to Notch Fresh Record as Alcoa Spurs Optimism.

S&P 500 set to notch fresh record as Alcoa spurs optimism

Sara Sjolin

The S&P 500 was poised for a fresh record amid better-than-expected earnings from Alcoa and optimism over a new prime minister in the U.K. to tackle the U.K.’s exit from the European Union.

S&P 500 futures ESU6, +0.52%  gained 9.45 points, or 0.4%, to 2,139.75, set to add to gains from Monday when the benchmark finished at an all-time high. The S&P 500 SPX, +0.34%  rose 0.3% to 2,137.16, enough to surpass the previous record close of 2,130.82 set in May 2015.
Dow Jones Industrial Average futures YMU6, +0.44%  rose 76 points, or 0.4%, to 18,224, while those for the Nasdaq-100 index NQU6, +0.59%  climbed 25.00 points, or 0.6%, to 4,574.
On Monday, the Dow DJIA, +0.44%  and Nasdaq Composite COMP, +0.64%  rose 0.4% and 0.6%, respectively, as investors continued to bask in the glow of Friday’s solid nonfarm payrolls report. Markets in the U.S. and Europe on Monday were also encouraged by news that U.K. Home Secretary Theresa May will become the new British prime minister, avoiding months of uncertainty over who would take over after David Cameron.
Read: BOE set to cut rates for the first time in 7 years on Brexit backlash
That optimism continued on Tuesday in both the U.S. and globally, bolstered by healthy risk appetite among investors. European and Asian markets were higher, oil rallied, while gold and the yen—traditional safe havens—slipped.
Alcoa earnings: A stronger-than-expected second-quarter earnings from Alcoa Inc. AA, +3.26% also fostered an upbeat trading environment on Tuesday. The company—which unofficially kicks off the earnings season each quarter—late Monday reported adjusted earnings per share of 15 cents, beating forecasts of 9 cents a share. Shares were up 3.8% premarket on Tuesday.
“There could be a few more [earnings] surprises during the week given the strength of the U.S. economy. The country’s economic data proved to be a lot stronger for the last quarter as compared with the previous one,” said Naeem Aslam, chief market analyst at ThinkForex, in a note.
Fastenal Co. FAST, +0.29% however, reported an unexpected drop in second-quarter profit, sending shares down 1.9% ahead of the bell.
Later this week, major banks like J.P. Morgan Chase & Co. JPM, +0.71%  Citigroup Inc. C, +0.74%  and Wells Fargo & Co. WFC, +0.61%  are slated to report.
Movers and shakers: Shares of Sage Therapeutics Inc. SAGE, -0.94%  soared 41% ahead of the bell after announcing positive phase 2 data for its treatment for patients with severe postpartum depression.
Seagate Technology PLC STX, +0.33%  jumped 14% in premarket trade on Tuesday after the data storage company late Monday said it would cut 6,500 jobs globally, which is about 14% of its workforce.
U.S.-listed shares of Shire PLC SHPG, -1.01%  rose 5.3% ahead of the bell after U.S. health regulators approved its dry-eye treatment, a potential blockbuster drug that is expected to go on sale in the third quarter.
AMC Entertainment Holding Inc. AMC, +0.65%  could also move after the company said it plans on buying Odeon & UCI Cinemas Group from private-equity firm Terra Firma, a deal valued at £921 million ($1.21 billion).
Economic news: Tuesday is shaping up as a busy day for Federal Reserve officials.
Fed Gov. Daniel Tarullo will give a speech on shadow banking at the Center for America Progress at 9:15 a.m. Eastern Time, followed by St. Louis Fed President James Bullard’s presentation at the National Association for Business Economics meeting at 9:35 a.m. Eastern.
Minneapolis Fed President Neel Kashkari hosts a town hall forum in Marquette, Mich., at 5:30 p.m. Eastern.
Cleveland Fed President Loretta Mester will talk about the economic outlook and monetary policy in Sydney, Australia, at 10:30 p.m. Eastern.
On the data front, a June reading on small-business optimism rose for a third straight month, but remained soft compared with its long-term average.
Job openings and wholesale inventories, both for May, are expected at 10 a.m.
See: MarketWatch’s Economic Calendar