Dow Poised for Rebound as HP Beats Expectations

LONDON -- Stock index futures at 7 a.m. EST indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI  ) may open 0.42% higher this morning, while the S&P 500 (SNPINDEX: ^GSPC  ) may open 0.5% higher. Solid falls over the last two days have dented investor confidence and seen the CNN Fear & Greed Index take a tumble from "extreme greed" to "greed." However, it's worth noting that the Dow Jones is only down by 0.7% so far this week -- not a big drop.

There is no economic data scheduled for release today, and corporate earnings are thin. However, shares in Abercrombie & Fitch (NYSE: ANF  ) may be actively traded this morning after it beat expectations with fourth-quarter earnings of $2.15 per share and full-year earnings of $3.16 per share, beating analysts' consensus forecasts for fourth-quarter earnings of $1.93 per share. The company also increased its quarterly dividend to $0.20. Other companies due to report earnings before the markets open this morning include Washington Post, Barnes Group, and Warner Chilcott.

Hewlett-Packard (NYSE: HPQ  ) is also likely to be in demand this morning after the computer giant beat expectations with its latest quarterly results, which were published after the close last night. HP reported fiscal first-quarter revenue of $28.4 billion, beating consensus estimates of $27.8 billion. Earnings came in at $0.82 per share, ahead of the $0.71 forecast, and HP reassured analysts with a second-quarter earnings forecast of $0.80 to $0.82 per share, beating consensus forecasts of $0.77 per share. HP closed up 2.4% yesterday and was almost 5% higher in premarket trading this morning.

European markets
European markets climbed this morning, retaking some of yesterday's losses despite news that the European Commission has downgraded its Europewide growth forecasts for the next three years. The EC is now forecasting that eurozone GDP will fall by 0.3% in 2013, rather than expand by 0.1% as previously forecast. Italy's 2013 GDP forecast was also cut from -0.5% to -1%, while forecasts for France and Germany were also reduced, although both are still expected to grow this year. Italy -- Europe's fourth-largest economy -- also faces a general election this weekend. The outcome is highly uncertain, but it could well threaten the progress of the country's austerity program.

At 7 a.m. EST, the DAX was up 0.99%, the CAC 40 was up 1.91%, the FTSE MIB was up 1.43%, and the IBEX 35 was up 1.47%. In London, the FTSE 100 (FTSEINDICES: ^FTSE  ) was up 0.76%, with 95 of the index's 101 members registering gains. Among the top risers, with gains of more than 3%, were cement group CRH, which has considerable exposure to the U.S. housing market, and industrial conglomerate Melrose Industries, which was 3.8% higher at the end of the morning session.

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