Early Gains Likely for Markets

LONDON -- The Dow Jones Industrial Average (INDEX: ^DJI  ) and the S&P 500 (INDEX: ^GSPC  ) are expected to open as much as 0.3% higher this morning, according to futures markets at 7 a.m. EDT.

With no new economic data scheduled for release today, investors will focus on developments in Europe and the latest corporate earnings reports. Oracle shares may slip slightly when markets open this morning. The computer giant's share price fell in after-hours trading last night after it reported disappointing first-quarter revenue caused by falling hardware sales.

On the upside, McDonald's announced a 10% increase in the company's quarterly dividend payment after the bell yesterday. Companies due to report quarterly earnings before markets open today include Darden Restaurants and KB Home. Sentiment remains buoyant among investors, however, with CNN's Fear & Greed Index currently sitting at 94 out of 100, signifying "extreme greed."

European markets
In Europe, markets have recovered slightly from the week's losses. Eurozone developments remain important, and new reports today suggest that Spain is in the advanced stages of negotiating a structural reform program that would allow it to anticipate the likely terms of a bailout. Reports also suggest that Greece is close to agreeing on the final budgetary cuts required for it to receive its next bailout payment.

In the U.K., Bank of England governor Sir Mervyn King said in an interview last night that it might be "acceptable" for the U.K. government to miss its deficit-reduction targets if the economy continued to grow slowly.

At 7 a.m. EDT, the DAX was up 0.3%, the CAC was down 0.05%, the FTSE MIB was up 0.4%, and the IBEX was up 0.3%. In London, the FTSE 100 (INDEX: ^FTSE  ) was down 0.1%, with Indian miner Vedanta Resources up 2.7% and leading the gainers at the end of the morning session. Heading the opposite way were Reckitt Benckiser and Imperial Tobacco, which were down by 1.8% and 1.4%, respectively.

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Roland Head has no shares in any of the companies mentioned in this article. The Motley Fool owns shares of Darden Restaurants, McDonald's, and Oracle. Motley Fool newsletter services have recommended buying shares of McDonald's. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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