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Dow May Rebound After The Home Depot, Inc. (HD) and Macy’s, Inc. (M) Beat the Street

LONDON — Stock index futures at 7 a.m. EST indicate that the Dow Jones Industrial Average may open 0.25% higher this morning, while the S&P 500 may open up 0.27%. The CNN Fear & Greed Index extended recent falls yesterday as news of Italy’s deadlocked election result sent the Dow sliding.

On the domestic agenda, economic data due for release today includes the Case-Shiller and FHFA home price indexes for December at 9 a.m. EST, followed by February’s consumer confidence index and January’s new-home sales at 10 a.m. EST. The consumer confidence index is expected to have risen to 62.3 from 58.6 in January, according to consensus forecasts, while new-home sales are expected to have risen to 384,000, from 369,000 in December.

The Home Depot, Inc. (NYSE:HD)Federal Reserve Chairman Ben Bernanke is due to testify to the Senate Banking Committee at 10 a.m. EST — Bernanke’s comments will be closely monitored by investors for any hints about the Fed’s plans for its bond-buying program.

The Home Depot, Inc. (NYSE:HD) is up 1.5% in premarket trading after the home improvement retailer released better-than-expected fourth-quarter results this morning. Q4 net income was up 32% over the prior-year quarter to $1 billion, or $0.68 per share, versus analyst estimates of $0.64 per share. The company cited strong U.S. sales, which contributed to a 14% rise in revenue, and announced a 34% dividend increase and a $17 billion share buyback program — it’s a good day to be a The Home Depot, Inc. (NYSE:HD) shareholder.

Similarly, Macy’s, Inc. (NYSE:M) is up 4.4% in premarket trading after reporting forecast-busting Q4 results. Ex-item earnings came in at $2.05 per share versus a consensus estimate of $1.99 per share. Revenue during the make-or-break holiday-shopping quarter was up 7% to $9.35 billion against estimates of $9.3 billion. Online sales were up 48% in the quarter, and the company also credits its localized merchandise and marketing.

Other premarket reports include the latest figures from R.R. Donnelley & Sons Company (NASDAQ:RRD), which delivered fourth-quarter revenue of $2.7 billion and diluted earnings of $0.43 per share, beating expectations of $2.55 billion and $0.37, respectively.

European markets
European markets fell heavily this morning as the risks of Italy’s deadlocked general election result became clear. The country’s Centre Left Democratic Party — seen by the markets as a safe pair of hands — secured an overall majority in the country’s lower house, but the senate remains deadlocked, with no party having an overall majority. This would make it impossible for a new government to pass legislation if no coalition can be agreed. Many analysts believe new elections are now the most likely outcome, and the yield on Italian 10-year government bonds rose by 0.4% to 4.8% this morning due to the risk that Italy could face a prolonged period with no effective government.