July 1 (Bloomberg) -- U.S. stock futures rose, after the Standard & Poor’s 500 Index posted the longest streak of quarterly gains since 1998, as a report showed China’s manufacturing expanded before the release of U.S. factory data.
Netflix Inc. advanced 4 percent after Goldman Sachs Group Inc. recommended investors buy shares in the world’s largest Internet-subscription service. GoPro Inc. jumped 9.3 percent after three straight days of gains following its initial public offering. Symantec Corp. dropped 1.1 percent after Bank of Montreal downgraded the biggest maker of anti-virus tools to the equivalent of hold.
Futures on the S&P 500 expiring in September climbed 0.2 percent to 1,956.7 at 8:31 a.m. in New York. The benchmark equity gauge rose 4.7 percent in the second quarter, a sixth consecutive increase. Dow Jones Industrial Average contracts added 40 points, or 0.2 percent, to 16,780 today.
“I was expecting a good performance into the summer months,” Gerhard Schwarz, the Munich-based head of equity strategy at Baader Bank AG, said by telephone. “I’ve been hoping earnings would be better. That’s what’s still missing, but the odds are quite good. Our call was that we might see some improvement in the economic indicators and that was delivered today with the Chinese PMI. So we’re seeing some recovery.”
A report today showed manufacturing in China expanded in June by the fastest pace this year. A purchasing managers’ index rose to 51.0 last month from 50.8 in May, the National Bureau of Statistics and China Federation of Logistics and Purchasing said. The reading matched economists’ median estimate. A similar gauge from HSBC Holdings Plc and Markit Economics advanced to 50.7 from the previous month’s 49.4.
Figures from the Institute for Supply Management at 10 a.m. New York time may show its manufacturing index climbed to 55.9 in June from 55.4 the previous month, according to a survey of economists. That would be the highest reading of 2014.
Separate data today may show total vehicles sales fell in June to 16.4 million from 16.7 million in May, according to economists surveyed by Bloomberg.
Other reports this week may yield further clues on the strength of the U.S. economy. A private release may show U.S. employers hired more workers in June than in the previous month. The official jobs data is due Thursday, a day before the U.S. Independence Day holiday.
U.S. equities have reached all-time highs, with the S&P 500 gaining 6.1 percent this year, as data from employment to housing fueled confidence that the U.S. economy is rebounding after the worst contraction in gross domestic product since 2009. Federal Reserve Chair Janet Yellen said on June 18 that accommodative monetary policy, rising property and equity prices and the improving global economy should lead to above-trend growth.
The S&P 500 trades at 16.6 times the projected earnings of its members, near its highest valuation in four years.
Investors will get a further chance to assess the economy when companies start releasing financial results in July. Earnings for S&P 500 companies probably grew 5.2 percent during the second quarter while sales rose 3.2 percent, analyst estimates compiled by Bloomberg show. The forecasts are lower than they were at the beginning of April, when analysts projected earnings to rise 7.3 percent and sales to increase 3.7 percent.
Netflix gained 4 percent to $458.40 today. Goldman Sachs boosted its recommendation on the Los Gatos, California-based company to buy from neutral, citing the potential for global subscription growth.
GoPro jumped 9.3 percent to $44.31 amid optimism that revenue tied to users’ shared videos will fuel profit growth. GoPro’s first-person-viewpoint cameras, which let surfers, sky divers and bungee jumpers document their exploits, have attracted a younger generation driven by selfies and sharing adventures on social media. The shares are up 69 percent since their market debut last week.
American Apparel Inc. slumped 8.9 percent to 82 cents. The company’s ousted Chief Executive Officer Dov Charney increased his holding in the retailer to 43 percent, stepping up a battle with the company’s board over his firing from the business he founded 16 years ago.
Symantec dropped 1.1 percent to $22.65. The Mountain View, California-based company was lowered to market perform from outperform at BMO.
Xerox Corp. retreated 1.2 percent to $12.29. Citigroup cut the company to neutral from buy.