Nikkei Futures Rise as S&P 500 Gains on Earnings, Ukraine

Geneva Talks
U.S. Secretary of State John Kerry and the European Union’s foreign-policy chief Catherine Ashton speak during a press conference at the Intercontinental hotel on April 17, 2014 in Geneva, Switzerland. Photographer: Harold Cunningham/Getty Images

Japanese stock-index futures rose as the Standard & Poor’s 500 Index capped its biggest weekly advance since July amid easing tensions over Ukraine and better-than-estimated earnings from companies from General Electric Co. to Morgan Stanley.

Nikkei 225 Stock Average futures increased 0.2 percent in Chicago, as the S&P 500 climbed 0.1 percent to advance for a fourth straight day. The yield on 10-year Treasuries rose nine basis points, the most in a month, to 2.72 percent. The yen was little changed against the dollar and euro at 7:02 a.m. in Tokyo. Financial markets in the U.S., U.K., Germany, Hong Kong, Singapore, Australia and New Zealand are among those that are closed for a holiday today. Japan, South Korea and mainland China are scheduled to be open.

Four-way talks on the crisis in Ukraine ended with an accord aimed at taking the first steps toward de-escalating the conflict after President Vladimir Putin said he hopes he won’t have to send troops. Morgan Stanley and General Electric Co. jumped as earnings topped forecasts, while Google Inc. and International Business Machines Corp. slid on disappointing sales. U.S. jobless claims increased less than forecast, indicating the world’s largest economy is holding up.

“Any deceleration of the conflict will be a relief for the market,” Terry Morris, a senior equity manager who helps oversee about $2.8 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co., said in a phone interview. “Combine the ease of the tension between Russia and Ukraine and generally a positive tone of earnings, the result is an upward drifting market.”

Ukraine Crisis

The agreement in Geneva was announced after talks between Russian Foreign Minister Sergei Lavrov, his Ukrainian counterpart, Andriy Deshchytsia, U.S. Secretary of State John Kerry and Catherine Ashton, the European Union’s foreign-policy chief, went on for more than six hours, longer than scheduled. Kerry said Russia, which the U.S. and its European allies accuse of stoking the conflict, must start implementing the deal within days.

“The Geneva meeting on the situation in Ukraine agreed on initial concrete steps to de-escalate tensions and restore security for all citizens,” the four said in a joint statement. “All sides must refrain from any violence, intimidation or provocative actions.”

U.S. Earnings

The S&P 500 jumped 2.7 percent for the holiday-shortened week, the most since July 12, and is up 0.9 percent for the year. The index dropped as much as 4 percent from its April 2 record as investors sold Internet and biotechnology stocks, the best performers during the five-year bull market, amid concern valuations had become too expensive before earnings.

Seven of 10 S&P 500 industries gained yesterday as industrial and energy companies climbed 0.8 percent for the best performances, with General Electric jumping 1.7 percent. The Dow Jones Industrial Average closed 16.31 points lower, dragged down by IBM.

Morgan Stanley added 2.9 percent as a gain in trading revenue helped profit top estimates. Google slid 3.7 percent as rising costs and a shift of advertising to mobile phones curbed results. IBM dropped 3.3 percent after reporting sales that trailed projections. UnitedHealth Group Inc. sank 3.1 percent after profit fell on cuts to its Medicare Advantage program.

Profit per share for the index’s constituents probably increased 0.7 percent in the first quarter, according to analyst estimates compiled by Bloomberg. Revenue climbed 2.6 percent from a year earlier, the projections show.

‘Normal Quarter’

“It’s a normal quarter where expectations were revised down far enough that companies are beating expectations,” Sam Wardwell, an investment strategist at Pioneer Investments in Boston, said in a phone interview. His firm manages about $245 billion. “I would view this as not an upside breakout, not a whole lot of positive surprises, but certainly satisfactory. We feel reasonably good that the second quarter and the rest of the year will trend in the positive direction.”

Treasuries also fell as the jobless claims report added to speculation the Federal Reserve will raise interest rates at some point next year.

Yellen said April 16 the central bank is committed to policies that will support the recovery. Fed policy makers are unwinding the bond-buying program they have used to support the economy. They have kept their target for overnight lending between banks in a range of zero to 0.25 percent since 2008.

Three rounds of bond purchases from the Fed have helped fuel economic growth, sending the S&P 500 surging as much as 180 percent from its 2009 low.

Emerging Markets

The MSCI Emerging Markets Index rose 0.7 percent. Russia’s Micex Index rebounded 0.5 percent.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, rose 0.1 percent for a fifth straight advance.

The dollar gained less than 0.1 percent to 102.40 yen. The euro added less than 0.1 percent to 141.45 yen. The dollar was little changed at $1.3814 per euro.

Gold fell as signs of gains in the U.S. economy eroded demand for the metal as a store of value. Futures dropped 0.7 percent to close at $1,293.90 an ounce. West Texas Intermediate oil rose 0.5 percent to $104.30 a barrel.