US index futures fluctuate, rally in Europe markets

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NEW YORK / Bloomberg

U.S. stock futures were little changed, after equities staged a late-day rebound, as investors assessed a selloff in China overnight and a rally in European markets. Inc. jumped nearly 11 percent after giving a forecast that topped estimates. Best Buy Co. added 2 percent, erasing a decline even as its first-quarter forecast missed estimates. Restoration Hardware Holdings Inc. plunged 21 percent after preliminary earnings missed estimates.
Standard & Poor’s 500 Index contracts expiring in March added 0.1 percent to 1,933 at 8:57 a.m. in New York. The underlying benchmark rebounded yesterday, sparked by a turnaround in oil prices to erase losses of as much as 1.6 percent. Futures on the Dow Jones Industrial Average climbed 25 points, or 0.2 percent, to 16,498.
“The conversation has shifted from an accelerating economy to one possible falling into recession,” said Kully Samra, who manages U.K. clients for Charles Schwab Corp. in London. “What happens over the next few days in the stock market depends on how much those worries intensify.”
China’s stocks tumbled the most in a month as surging money-market rates signaled tighter liquidity. Meanwhile, Lloyds Banking Group Plc paced a surge in European shares, with the Stoxx Europe 600 Index up 2.1%. Concern that a slowdown of the Chinese economy is deepening, compounded by falling commodity prices led by crude, has roiled equity markets since August.
Wednesday’s gains helped the S&P 500 cut its decline this month to 0.5 percent from as much as 6.7 percent on Feb. 11. The index is still heading for a third straight monthly drop which would be the longest stretch in more than four years. The benchmark reached a six-week high on Monday after a rebound from a nearly two-year low, led by banks and technology shares, trimmed its 2016 drop by more than half.
Investors are scrutinizing economic data to gauge growth in the world’s largest economy, and a report today showed orders for U.S. capital goods rebounded in January by the most since June 2014. Orders for all durable goods — items meant to last at least three years — rose 4.9 percent, the most since March. Separate data showed the number of Americans filing applications for unemployment benefits rose last week from a three-month low, in part reflecting the typical swings during holiday periods.
With the earnings season wrapping up, about three-quarters of S&P 500 firms have exceeded profit projections, while less than half topped sales forecasts. Analysts estimate earnings at S&P 500 companies fell 4.2 percent in the fourth quarter, compared with Jan. 15 predictions for a 7 percent slump.

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