U.S. Stock Futures Rise on Japan Amid Spending budget Negotiations

U.S. stock-index futures advanced as President Barack Obama and Congress prepared to resume budget discussions and amid expectations Japan’s new government will act to bolster the economy.

Intel Corp. added 0.5 percent after research firm IDC forecast worldwide semiconductor revenue will climb 4.9 percent in 2013. Bank of America Corp. and American International Group Inc. rose more than 0.3 percent as financial shares advanced.

Standard & Poor’s 500 Index futures expiring in March increased 0.2 percent to 1,422 at 8:46 a.m. in New York. Dow Jones Industrial Average futures gained 20 points, or 0.2 percent, to 13,085.

U.S. equity markets were closed for the Christmas holiday yesterday. The S&P 500 (SPX) dropped 1.2 percent over the previous two trading days amid concern policy makers will fail to strike a compromise on more than $600 billion in automatic budget cuts and higher taxes, the so-called fiscal cliff. The gauge has still rallied 13 percent this year, on course for its largest annual gain since 2009.

“2013 will mainly be guided by political news, budget discussions, statements from central banks and economic surprises,” William De Vijlder, chief investment officer Strategy & Partners at BNP Paribas Investment Partners in Brussels, wrote in a December strategy note released today.

House Speaker John Boehner and the president have been unable to agree on tax-rate increases for top earners or cuts to entitlement programs, complicating the chances of getting a package done. Congress is due to return to Washington tomorrow, the same day Obama will arrive from his Christmas vacation in Hawaii.

Interim Bill

Before going on vacation, Obama urged leaders of both parties to put together an interim bill to keep taxes from rising on middle-income Americans as they work on a more comprehensive package.

The MSCI Asia Pacific Index (MXAP) climbed 0.2 percent today, trading less than 1 percent from its highest close for the year, as the yen dropped and Shinzo Abe was approved as Japan’s prime minister. Abe, whose Liberal Democratic Party won a landslide victory in the Dec. 16 election, said today his government’s mission is to restore a strong economy. European markets remained closed for a second day.

House prices in 20 U.S. cities rose 4 percent in the 12 months ended October, the best year-over-year performance since June 2010, an S&P/Case-Shiller report may show today. The projected gain for the month would follow a 3 percent increase in the year through September.

Holiday Spending

U.S. holiday sales growth slowed by more than half this year after gridlock in Washington soured consumers’ moods and Hurricane Sandy disrupted shopping, MasterCard Advisors SpendingPulse said.

Retail sales grew by 0.7 percent from Oct. 28 through Dec. 24, the research firm said yesterday, without providing a dollar figure in the billions. Sales grew at a 2 percent pace in the same period a year ago. SpendingPulse tracks total U.S. sales at stores and online via all payment forms.

Intel added 0.5 percent to $20.74. IDC predicted chip sales will rise to $319 billion next year, after gaining less than 1 percent in 2012. Demand was hurt this year by a number of factors, including weakness in personal computer demand, the research firm said.

Financial shares climbed. Bank of America increased 0.4 percent to $11.30. AIG rose 0.3 percent to $35.31.

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