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U.S. Stock Futures Rise as Ukraine Tension Eases Amid Earnings

July 22 (Bloomberg) -- U.S. stock futures rose, signaling the benchmark gauges will rebound from yesterday’s slide, as the standoff over a downed jet in Ukraine eased and investors assessed earnings from Travelers Cos. to Comcast Corp.

Chipotle Mexican Grill Inc. jumped 11 percent after reporting earnings and sales that beat analyst projections. Comcast added 1.2 percent after profit topped estimates on higher revenue from Internet customers. McDonald’s fell 2 percent after profit fell short of analysts’ estimates. Travelers dropped 2.2 percent as earnings slid 26 percent.

Futures on the S&P 500 expiring in September rose 0.5 percent to 1,975.6 at 8:33 a.m. in New York. Dow Jones Industrial Average contracts increased 63 points, or 0.4 percent, to 17,046 today.

“It’s a day-by-day encounter for markets, with every speech and communication from politicians giving us the direction for the day,” Lorne Baring, who helps oversee about $500 million as managing director at B Capital SA in Geneva, said by telephone, referring to Russia. “The earnings season has been quite positive. What we see is that the earnings are there and that probably gives rise to more upside from the S&P 500’s current level.”

The S&P 500 fell 0.2 percent yesterday on concern that the crisis in Ukraine could lead to deeper sanctions against Russia. European Union governments labored to identify more Russian businesspeople and companies to sanction and pressed President Vladimir Putin to speed a probe into the downing of Malaysian Air flight MH17 or face isolation.

Consumer Prices

Equities futures extended gains after data showed the cost of living in the U.S. rose in June, paced by a jump in gasoline that is now reversing, bolstering Federal Reserve Chair Janet Yellen’s view that recent increases were temporary.

The consumer price index increased 0.3 percent after a 0.4 percent gain the prior month, matching median forecast of 85 economists surveyed by Bloomberg, figures from the Labor Department showed today in Washington.

Data at 10 a.m. in Washington may show sales of existing homes increased at a 4.99 million annualized pace in June, compared with 4.89 million in May, according to economists surveyed by Bloomberg News.

The S&P 500 has advanced almost 7 percent this year amid better-than-estimated corporate earnings and central bank stimulus as the U.S. economy shows signs of recovering from a 2.9 percent contraction in the first quarter.

The gauge closed at a record 1,985.44 on July 3 and trades at 18.3 times reported earnings, near the highest level in four years. The index has not had a drop of more than 10 percent since 2011.

Earnings Scorecard

Earnings at the gauge’s members probably rose 6.2 percent in the second quarter, while sales gained 3.3 percent, according to analyst estimates compiled by Bloomberg.

Some 36 companies listed on the S&P 500 report earnings today, including Coca-Cola Co., McDonald’s, Microsoft Inc. and Apple Inc. About 77 percent of S&P 500 companies that have posted results this season have beaten analysts’ estimates for profit, while 71 percent exceeded sales projections, according to data compiled by Bloomberg.

Chipotle jumped 11 percent to $652.06. The restaurant chain said second-quarter net income rose 25 percent and revenue jumped to $1.05 billion, buoyed by an increase in traffic at existing outlets and by sales in new stores.

Comcast rose 1.2 percent to $54.48. The largest cable company in the U.S. said second-quarter revenue increased 3.5 percent to 16.8 billion, while analysts estimated almost $17 billion. The company is in the process of buying Time Warner Cable Inc.

DuPont Co. added 0.4 percent to $65.79. The U.S. chemicals producer posted lower-than-estimated revenue after some farmers switched to genetically modified soybeans from corn.

Travelers declined 2.2 percent to $93.15. The only property-casualty insurer in the Dow average said second-quarter profit missed estimates on catastrophe costs.

Harley-Davidson Inc. dropped 3.1 percent to $65 after lowering its forecast for new motorcycle shipments in 2014 to no more than 275,000, after previously predicting at least 279,000.

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