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U.S. Stock-Index Futures Rally on Apple, Facebook Earnings Boost

April 24 (Bloomberg) -- U.S. stock-index futures advanced and technology shares rallied in pre-market trading as better- than-estimated earnings from Apple Inc. and Facebook Inc. boosted optimism equity gains will continue.

Apple jumped 8.4 percent after after selling more iPhones than analysts predicted. Facebook gained 5.3 percent after net income almost tripled on of a surge in mobile-advertising revenue. Caterpillar Inc. added 4.1 percent after raising its forecast for 2014 profit target. General Electric Co. rose 0.7 percent as it was said to be in talks to buy France’s Alstom SA.

Futures on the Nasdaq 100 Index expiring in June climbed 1.7 percent to 3,614.75 at 8:32 a.m. in New York. Standard & Poor’s 500 Index futures added 0.4 percent to 1,881.20. Dow Jones Industrial Average contracts increased 35 points, or 0.2 percent, to 16,495.

“Extremely strong updates from both Facebook and Apple are rippling through what is proving to be a generally pleasing quarterly reporting season,” Richard Hunter, head of equities at Hargreaves Lansdown Plc in London, wrote in an e-mail. “The majority of companies which have updated so far have beaten expectations. As sentiment improves, equities appear to remain the asset class of choice among investors for the time being.”

The S&P 500 fell 0.2 percent yesterday, snapping a six-day rally, as companies including Amgen Inc. reported worse-than- estimated results and sales of new houses unexpectedly dropped.

Durable Goods

A Commerce Department report today showed orders for durable goods such as cars and computers rose more than forecast in March, pointing to faster production that will help spur the economy.

Separate data showed more Americans than forecast filed applications for unemployment benefits last week as the Easter holiday period made it more difficult to adjust the data for seasonal variations. Jobless claims increased by 24,000 to 329,000 in the week ended April 19, the most in a month.

advanced 2 percent in March, according to the median forecast of economists in a Bloomberg survey. They increased 2.2 percent in February.

Of the 169 companies on the S&P 500 that have released earnings this season, 75 percent have exceeded analysts’ profit estimates, while 54 percent have beaten sales projections, according to data compiled by Bloomberg.

Analysts predict companies on the benchmark gauge will collectively report a 0.7 percent increase in first-quarter profit and a 2.6 percent increase in revenue.

Apple gained 8.4 percent to $568.65. The world’s most valuable company reported surging sales of iPhones after the handset became available through China Mobile Ltd. Apple also said it will increase its share repurchase authorization by $30 billion, boost its dividend and split its stock seven for one.

Apple’s first split in nine years would cut the stock price to roughly $75 a share, removing an obstacle to its inclusion in the Dow average. The shares currently trade for so much that putting it in the Dow would have given Apple too much influence in the 118-year-old equity gauge, which ranks companies by the level of their shares rather than market value.

Facebook, GE

Facebook advanced 5.3 percent to $64.60. The world’s largest social-networking site reported first-quarter profit and revenue yesterday that blew past analysts’ estimates. Mobile accounted for 59 percent of advertising revenue, up from almost nothing at the time of its initial public offering in May 2012.

GE climbed 0.7 percent to 26.60. People with knowledge of the matter said the company is in talks to buy Alstom in what would be its biggest-ever acquisition. The U.S. maker of jet engines and locomotives may pay more than $13 billion for Alstom, one of the people said.

Caterpillar rose 4.1 percent to $107.62. The largest maker of mining and construction equipment posted first-quarter earnings and sales that beat analysts’ estimates as it boosted its full-year outlook on improved expectations for the building industry.

Artificial Joints

Zimmer Holdings Inc. jumped 14 percent to $104.25. The maker of artificial joints agreed to acquire rival orthopedic- device maker Biomet Inc. in a cash-and-stock deal valued at $13.4 billion. Closely held Biomet’s parent, Biomet Group Inc., will withdraw its plans for an initial public offering, Zimmer said.

Qualcomm Inc. dropped 4.1 percent to $77.37. The largest mobile-chip maker forecast third-quarter profit and revenue that fell short of some analysts’ estimates, citing weaker phone sales in China as the rollout of a fast new data network takes longer than Qualcomm expected.

The company also said it received a Wells notice from the U.S. Securities and Exchange Commission last month that the agency recommended enforcement action related to bribery allegations in China.

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