U.S. Stock Futures Rise on IBM Profit, Rate-Cut Speculation

(Bloomberg) -- U.S. stock-index futures rallied after International Business Machines Corp.'s profit topped analysts' estimates and investors bet on larger interest-rate cuts by the Federal Reserve.

IBM, the world's biggest computer-services provider, rose on results that were boosted by international growth. Apple Inc. climbed after Bank of America Corp. increased its earnings forecast for the maker of the iPod media player. Barrick Gold Corp. and Newmont Mining Corp. advanced as gold reached a record.

The gains today signaled that the market may rebound from the worst start for a year since 1982. Standard & Poor's 500 Index futures expiring in March added 10 to 1,417.8 as of 9:16 a.m. in New York. Dow Jones Industrial Average futures rose 111 to 12,772 and Nasdaq 100 Index futures increased 24.75 to 1,950.25.

``One of the driving forces behind weakness in the markets had been the theory corporate earnings would be squeezed with the global slowdown,'' said Tim Smalls, head of U.S. trading at Execution LLC in Greenwich, Connecticut. ``IBM telling you they're doing well is going to take a little bit of the pressure off.''

U.S. stocks were poised to rebound from the worst start for a year since 1982 as Fed fund futures showed traders see a 44 percent probability the central bank will lower its benchmark interest rate by 0.75 percentage point to boost economic growth at its Jan. 30 meeting. Before Jan. 11, traders saw no chance of a three-quarter point cut.

 

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