U.S. futures hold gains after housing data; Dow up 0.7%

Investing.com – U.S. stock futures pointed to a higher open on Tuesday, buoyed by sharp gains in European equities and as markets awaited the start of a two-day Federal Reserve monetary policy meeting later in the day.  

Ahead of the open, the Dow Jones Industrial Average futures pointed to a gain of 0.7%, S&P 500 futures signaled a rise of 0.85%, while the Nasdaq 100 futures indicated a 0.9% increase.      

Stock futures held on to gains after official data showed that U.S. building permits rose to a seven-month high of 0.62 million in August, while housing starts fell to 0.57 million, worse than expectations for a decline to 0.59 million.  

Global equity markets largely shrugged off a downgrade to Italy’s credit rating, instead focusing on hopes that Greece was close to receiving the next tranche of bailout funds following a report in the Wall Street Journal, citing a Greek finance ministry official.

Well-received Greek and Spanish bond auctions and news that Greece paid EUR769 million in bond coupons due Tuesday also helped lift sentiment.

Shares in the financial sector performed strongly ahead of the open, tracking their European counterparts higher. Bank of America and JP Morgan Chase each saw shares climb 1.1%, while U.S.-listed shares of Barclays rose 1%.  

Apple shares extended strong gains from the previous session, advancing 1.1% to hit a fresh record high in pre-market trade, amid speculation the company will debut the iPhone 5 in October.

On the downside, shares in rare earth mineral producer Molycorp tumbled 4.7% after JP Morgan Chase downgraded the stock to ‘neutral’ from ‘overweight’ and cut its price target by nearly 37% to USD66 per share. 

ConAgra Foods saw shares drop 4.5% after saying that fiscal first quarter profit dropped 41% to USD85.3 million, as high raw material prices weighed on results.

Other stocks in focus included software makers Oracle and Adobe Systems, as well as cruise-line operator Carnival, which were all slated to release earnings results later in the day.

Across the Atlantic, European stock markets were broadly higher. The EURO STOXX 50 jumped 1.35%, France’s CAC 40 rose 0.9%, Germany's DAX rallied 1.85%, while Britain's FTSE 100 gained 1.2%.

During the Asian trading session, Hong Kong’s Hang Seng Index rose 0.5%, while Japan’s Nikkei 225 Index returned from a three-day holiday weekend to fall 1.6%. 

Later in the day, the Federal Reserve was to begin its two-day meeting in Washington DC. A highly-anticipated announcement on monetary policy is due Wednesday.