By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- U.S. stock futures traded slightly higher on Wednesday as investors considered the ongoing budget stalemate in Washington as well as news that Janet Yellen is expected to be nominated as chairwoman of the Federal Reserve.
Futures for the Dow Jones Industrial Average (DJZ3) were last up 29 points, or 0.2%, to 14,743, while those for the Standard & Poor's 500 index (SPZ3) rose 4.70 points, or 0.3%, to 1,655.10.
Futures for the Nasdaq 100 index (NDZ3) added 8.25 points, or 0.3%, to 3,159.
As the government shutdown entered its ninth day, the minutes of the Fed's Sept. 16-17 meeting will be released at 2 p.m. Eastern. Economists are eager for clues as to what prompted officials to hold off on tapering bond buying.
A White House official said President Barack Obama will officially nominate Yellen to be Fed chief at 3 p.m. Eastern on Wednesday.
"Unless a clear resolution is in sight, this bounce in U.S. futures will be short... and the bias could still be to the downside," said Naeem Aslam, chief market analyst at AvaTrade, in emailed comments. "This news has certainly supported the market in a way, that at least there could be no tapering till December or early next year. However, the question remains that the self-destructiveness which politicians are causing to the U.S. economy could be recovered soon by Janet Yellen's Band-Aid."
President Obama has pressed House Speaker John Boehner to reopen the government and raise the debt ceiling, saying he wouldn't talk with his political opponents until those points are settled.
Boehner shot back that Obama's position was "unsustainable" and that he was demanding "unconditional surrender" from Republicans.
"Politicians are putting markets under pressure, and now the U.S. is on the road to have its rating cut or default," said David Thebault, Paris-based head of quantitative sales trading at Global Equities. "Volatility is at its highest level since June, and looking at the past, it shows us that this kind of trading path takes time -- too much time for the market. But markets have some spurts when negotiations progress." Read: Why a Wall Street drop may be needed to break political logjam
Tuesday marked a day when a lack of political progress hit investor sentiment hard. The Dow industrials (DJI) skidded nearly 160 points, or 1%, as fears over the political impasse grew, while the S&P 500 index (SPX) slid 1.2% to a four-week low. The CBOE Volatility Index (VIX)topped 20 for the first time since June.
Gold futures (GCZ3) fell $19.80 to $1,304.80 an ounce as the dollar (DXY) rose.
Reports that Jos. A. Bank Clothiers Inc. (JOSB) could combine with Men's Wearhouse Inc. (MW) sent both stocks flying higher. Men's Wearhouse jumped 32% and Jos. A. Bank surged 10%.
Costco Wholesale Corp. (COST) shares fell 1.7% after the retailer posted a 1.3% rise in fiscal fourth-quarter earnings as same-store sales rose for both its domestic and international sides.
Family Dollar Stores Inc. (FDO)(FDO)(FDO)(FDO) shares fell 2.3% after the company reported a 26% rise in fiscal fourth-quarter earnings, but same-store sales were weaker than expected. The firm gave a cautious view for the recently started fiscal year. Its fiscal first-quarter outlook also missed expectations.
Earnings season unofficially kicked off Tuesday evening with Alcoa Inc. (AA). The aluminum maker swung to a profit on lower costs, with results sailing past Wall Street forecasts and shares rising in late trade. Alcoa, which acts as an early gauge of the health of global manufacturing, stood by an earlier forecast that global demand for aluminum will rise 7% this year. Shares rose 2.9%.
Yum Brands (YUM) fell 6.5% after the KFC and Taco Bell operator cut its outlook for the year on soft China sales late Tuesday.
-Barbara Kollmeyer; 415-439-6400; AskNewswires@dowjones.com
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(END) Dow Jones Newswires
10-09-13 0837ETCopyright (c) 2013 Dow Jones & Company, Inc.
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