(Bloomberg) — U.S. stock futures advanced, after the Standard & Poor’s 500 Index posted its biggest weekly loss in three months, on an increase in takeover activity and better- than-forecast earnings from Citigroup Inc.
Citigroup climbed 3.8 percent after also agreeing to pay $7 billion to settle a mortgage-bond probe. Apple Inc. rose after Barclays Plc. advised investors to buy shares in the world’s biggest company by market value. URS Corp. jumped 7.7 percent after Aecom Technology Corp. agreed to acquire the construction-management company for about $4 billion. AbbVie Inc. fell 2.1 percent after Shire Plc said it’s willing to recommend the U.S. company’s latest bid to its shareholders.
Futures on the S&P 500 expiring in September added 0.4 percent to 1,970.60 at 9:05 a.m. in New York. Dow Jones Industrial Average contracts increased 79 points, or 0.5 percent, to 16,960 today.
“The second-quarter earnings season in the U.S. is likely to be the next major driver of global markets,” Evan Lucas, a markets strategist in Melbourne at IG Ltd., wrote in an e-mail to clients today. “With all the major U.S. banks reporting this week, the market will get the best view of the ‘self-sustaining’ U.S. economy that the Fed now sees.”
The S&P 500 slid 0.9 percent last week amid signs of financial stress at a Portuguese bank and speculation that the recent rally is overdone. The benchmark gauge closed at an all-time high and the Dow topped 17,000 for the first time on July 3. The S&P 500 hasn’t had a drop of 10 percent in more than two years and the gauge trades at a valuation of 18 times reported earnings, the highest since 2010.
JPMorgan Chase & Co., Goldman Sachs Group Inc., Yahoo! Inc. and Intel Corp. are among the 58 companies on the S&P 500 posting earnings this week. Profit by the gauge’s members increased 4.5 percent in the second quarter. And revenue rose 3.1 percent, according to estimates compiled by Bloomberg.
Citigroup jumped 3.7 percent to $48.73. The third-largest U.S. bank by assets agreed to pay $7 billion in fines and consumer relief to resolve government claims that it misled investors about the quality of mortgage-backed bonds sold before the 2008 financial crisis. The bank said second-quarter profit tumbled 96 percent on $3.7 billion in costs tied to the settlement. Excluding items, profit was $1.24 a share. The average estimate of 25 analysts surveyed by Bloomberg was $1.05.
Investors this week will also be watching statements from central banks and economic reports for clues to the strength of the global economy.
Federal Reserve Chair Janet Yellen is due to testify to U.S. lawmakers. Yellen will deliver her semi-annual monetary policy testimony to the Senate Banking Committee tomorrow and to the House Committee on Financial Services the following day.