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U.S. Stock Futures Rise as Earnings Overshadow Ukraine Tensions

Aug. 7 (Bloomberg) -- U.S. stock futures advanced as better-than-estimated earnings from companies including 21st Century Fox Inc. and CenturyLink Inc. overshadowed tensions over the crisis in Ukraine.

Fox climbed 5.1 percent as “X-Men: Days of Future Past” and “Rio 2” led to a jump in income at its film business. CenturyLink gained 2.9 percent as high-speed Internet connections helped sales to grow. Keurig Green Mountain Inc. slipped 1.2 percent after the coffee brewer’s profit forecast for the current period disappointed analysts.

Standard & Poor’s 500 Index futures expiring next month rose 0.5 percent to 1,924.7 at 8:22 a.m. in New York. Dow Jones Industrial Average contracts added 60 points, or 0.4 percent, to 16,455 today.

“The year-on-year revenue and profit growth rate looks pretty encouraging this time round,” said William Hobbs, the London-based head of equity strategy at Barclays Plc’s wealth- management unit. “Not only are we having a good earnings season, but our faith in the second half of the year for the U.S. corporate sector should be increasing. Recent economic data is pointing to a faster pace of growth in the third quarter than consensus has penciled in.”

The S&P 500 has lost 3.4 percent since reaching a record of 1,987.98 on July 24, leaving it 71.88 points away from erasing its gain for the year. The benchmark slid 2.7 percent last week, its biggest drop since June 2012, as companies around the globe posted disappointing results, Argentina defaulted and Portugal’s Banco Espirito Santo SA posted 4.3 billion euros ($5.8 billion) of provisions.

ECB Rate

The European Central Bank kept interest rates unchanged at record lows today as the Ukraine crisis strengthened the headwinds facing the euro area’s recovery. German industrial output grew less than forecast in June, data showed.

ECB President Mario Draghi has said large-scale asset purchases are an option for dealing with a severe economic shock, leaving investors seeking clarification on what the trigger could be.

Russia has massed troops along its border with Ukraine, prompting the U.S. to say there’s a risk of an invasion. President Putin retaliated yesterday against European Union and U.S. sanctions by ordering restrictions on food imports from countries that seek to punish Russia.

A Labor Department report at 8:30 a.m. in Washington may show that 304,000 Americans filed applications for unemployment benefits last week, up from 302,000 in the preceding period, economists predicted. Average weekly jobless claims in July fell to their lowest level since April 2006.

Economic Growth

Data last week showed U.S. gross domestic product expanded at a 4 percent annual pace in the second quarter, confirming the Fed’s view that a first-quarter contraction was transitory. The government’s employment report showed companies in the U.S. added more than 200,000 jobs for a sixth straight month in July, the longest such period since 1997.

News Corp. and CBS Corp. are among 17 S&P 500 members that report their financial results today, according to data compiled by Bloomberg. About 75 percent of companies to have posted earnings this season beat analysts’ estimates for profit, while 65 percent exceeded sales projections.

Profit probably rose 9.4 percent in the second quarter, while sales gained 4.2 percent, according to analyst estimates compiled by Bloomberg.

Fox Advances

Fox rose 5.1 percent. Fourth-quarter profit excluding items jumped 35 percent to 42 cents a share, while sales increased 17 percent to $8.42 billion, according to a statement late yesterday. Analysts had predicted profit of 39 cents a share and revenue of $8 billion. Income almost tripled at Fox’s film division. It climbed 11 percent at the company’s cable television unit.

CenturyLink gained 2.9 percent. The telecommunications company reported second-quarter adjusted earnings of 72 cents a share, more than the 65 cents predicted by analysts.

Carnival Corp. added 2.3 percent after Bank of America Corp. raised its rating on the cruise-ship operator to buy from neutral.

Keurig declined 1.2 percent. The coffee company predicted profit of 68 cents to 75 cents a share for the fourth quarter of its financial year, falling short of the 86 cents projected by analysts. Keurig said a higher tax rate will probably shave 10 cents a share off profit.

Mylan Inc. slipped 1.6 percent. The drugmaker said third- quarter adjusted profit will probably not climb above 95 cents a share, less than the $1.03 that analysts had projected. Mylan narrowed its forecasts for annual sales and profit, saying the Food and Drug Administration had delayed approving some of its products.

To contact the reporters on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net; Joseph Ciolli in New York at jciolli@bloomberg.net To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net Jeff Sutherland

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