US stock-index futures rise as Apple rallies on cheaper iPhone

Bloomberg

U.S. index futures climbed as Apple Inc. led technology shares higher and investors awaited the Federal Reserve’s update for clues on the timing of interest-rates increases.
Apple rose 5.8 percent in early New York trading after posting a smaller-than-expected revenue decline as its cheaper iPhone model gained more traction. Suppliers Qorvo Inc. and Skyworks Solutions Inc. gained in Europe. Twitter Inc. sank 11 percent after its third-quarter sales fell well short of analyst predictions. Coca-Cola Co., Boeing Co. and Facebook Inc. are among firms reporting results today.
Nasdaq 100 Index contracts expiring in September rose 0.7 percent to 4,695.5 at 10:08 a.m. in London, while S&P 500 futures climbed 0.2 percent. The equity benchmark has hovered near a record after a rally pushed it up for four straight weeks. Dow Jones Industrial Average futures added 46 points, or 0.3 percent, to 18,444 today.
“A rally of this size for Apple is pretty remarkable,” said Oliver Herington, who sells U.S. shares at London-based brokerage Atlantic Equities LLP. “It’s a big confidence boost for the market because a lot of investors around the world own it, and now they unexpectedly have a very nice buffer to work with. U.S. markets are on fire at the moment, and fundamental data is where it needs to be. I don’t see that being derailed even if the Fed gives us one more rate hike this year.”
Economists estimate the Fed will keep borrowing costs unchanged at a decision due at 2 p.m. New York time. Traders are pricing in less than even odds of a rate increase until February 2017.
While recent economic data have beaten forecasts by the biggest margins since December 2014, Fed Chair Janet Yellen and her colleagues have emphasized a gradual pace of tightening. Reports due today are forecast to show orders for durable goods fell less in June from a month earlier, while pending home sales rebounded from their biggest slump in six years.
Traders will also focus on earnings, with more than 50 companies in the S&P 500 scheduled to release results on Wednesday. The reporting season has delivered more optimistic outlooks, as the proportion of companies raising their forecasts jumped toward a 12-year high, data from Credit Suisse Group AG show.
After recovering its losses following the U.K.’s vote to leave the European Union, the S&P 500 went on to post seven records in 10 days. Optimism that corporate earnings would help support gains has boosted the gauge by 19 percent from a February low. Analysts have tempered their estimates for second-quarter profit declines to 4.5 percent and are forecasting a rebound starting in the current period. The S&P 500 is now up 6.1 percent for the year, one of the biggest winners among developed-market benchmarks.
Among other stocks moving on corporate news, Analog Devices Inc. jumped 9.4 percent after saying it will buy Linear Technology Corp. for about $14.8 billion.
Edwards Lifesciences Corp. climbed 6.4 percent after the aortic-valve maker beat analysts’ estimates and raised its 2016 earnings forecast for a third quarter in a row. Akamai Technologies Inc. dropped 5.9 percent after its sales and profit forecasts for the current quarter missed analysts’ estimates.