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U.S. Futures Rise With S&P 500 Near Record Before Jackson Hole

Aug. 21 (Bloomberg) -- U.S. stock futures climbed, indicating the Standard & Poor’s 500 Index may reach a record, amid speculation the Federal Reserve will continue to support the economy as central bankers meet in Jackson Hole.

Futures on the S&P 500 expiring in September added 0.2 percent to 1,987.30 at 8:02 a.m. in New York. Dow Jones Industrial Average contracts rose 40 points, or 0.2 percent, to 16,990 today.

“Markets are looking for some indication from Yellen as to what happens once quantitative easing stops,” Peter Dixon, a global equities economist at Commerzbank AG in London, said by phone. “I suspect she’ll say that it depends on the data. The U.S. economy is in reasonable shape. The task for central banks, and Yellen is at the forefront, is how to wean markets away from almost unlimited liquidity provisions when the economy is recovering but remains fragile.”

The S&P 500 rose 0.3 percent yesterday, closing within two points of a record, as minutes from the latest Fed meeting indicated the central bank will continue to support the U.S. economy. The benchmark index has rebounded 4 percent from a three-month low on Aug. 7 as investors speculated central banks won’t raise rates sooner than anticipated.

The gauge has not had a decline of 10 percent in almost three years. It trades at 17.8 times the reported earnings of its companies, near the highest level since 2010.

Fed Chair Janet Yellen will speak tomorrow at the Fed Bank of Kansas City’s economic symposium that starts today in Jackson Hole, Wyoming. European Central Bank President Mario Draghi will also speak.

Fed Minutes

Minutes to the central banks’ July meeting released yesterday showed that officials raised the possibility that aggressive stimulus will end sooner than anticipated, even as they acknowledged persistent slack in the labor market.

The S&P 500 has almost tripled since its March 2009 low, helped by three rounds of Fed stimulus, coupled with better- than-projected corporate earnings. The central bank will probably wind up its asset-purchase program at its October meeting, according to a Bloomberg survey of economists.

Investors are betting that a soft touch on monetary policy will continue to suppress stock volatility, pouring a record stretch of cash into an exchange-traded note that rallies as calm returns to equities. The Chicago Board Options Exchange Volatility Index, the gauge known as the VIX, has lost 31 percent this month, closing at its lowest level since July 23.

A report at 8:30 a.m. in Washington may show initial jobless claims fell to 303,000 in the week ended Aug. 16, from 311,000 in the previous period, according to the median estimate of economists surveyed by Bloomberg News.

Factory Data

Another release at 9:45 a.m. may show a preliminary gauge of manufacturing slipped to 55.7 this month from 55.8 in July. Data may also show existing-home sales expanded at a slower pace in July and the Conference Board’s index of leading indicators, a measure of the outlook for the next three to six months, rose 0.6 percent in July, following a 0.3 percent increase in June, economists forecast.

Gap Inc., Ross Stores Inc. and Salesforce.com Inc. are among the eight S&P 500 companies reporting earnings today. Sears Holdings Corp., the retailer controlled by billionaire hedge-fund manager Edward Lampert, fell 6.8 percent after posting a wider second-quarter loss as sales decreased for the 30th straight quarter.

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