Stocks edge higher to open week after FedEx raises its forecast for current quarter

Stocks climb modestly after FedEx raises outlook

NEW YORK — Stocks are edging higher after FedEx raised its forecast for the current quarter and predicted a moderate recovery in the global economy.

FedEx’s outlook Monday was the latest in a string of upbeat earnings news that has helped lift stocks in recent days. The company is considered an economic bellwether because if companies and consumers are shipping more, that means the economy is likely growing.

The market is also awaiting the Commerce Department’s report on June new home sales. It is expected sales rose slightly last month.

The Dow Jones industrial average is up 12.11, or 0.1 percent, at 10,436.05. The Standard & Poor’s 500 index is up 1.65, or 0.2 percent, at 1,104.31, while the Nasdaq composite index is up 2.35, or 0.1 percent, at 2,271.82.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

NEW YORK (AP) — Stocks looked to open slightly higher Monday after FedEx Corp. raised its forecast for the current quarter and said it expected a moderate recovery in the global economy.

FedEx’s outlook was the latest piece of upbeat earnings news that have lifted stocks in recent days. The news turned stock index futures around from a slight loss as the opening bell approached.

The shipping company doubled its earnings prediction for its first fiscal quarter and said it had better than expected growth in its overnight and ground delivery services. Like UPS Inc., FedEx is seen as an economic bellwether. If companies and consumers are shipping more, that points to a strengthening economy.

FedEx’s stock rose $3.70, or 4.7 percent, to $82.66 in pre-opening trading

European markets edged lower as investors had their first chance to react to a series of tests that assessed the health of the continent’s big banks. Regulators said only seven of the 91 banks tested would struggle if the European economy and government debt problems worsened.

U.S. investors were able to trade after the results were released Friday afternoon and sent stocks higher.

The market was awaiting the government’s report on new home sales during June. It is expected that sales edged higher from record lows in May as the housing market recovery remains erratic.

Stocks surged last week as mostly strong corporate earnings and outlooks, as well as the results of the European bank tests, added to hopes that the global economy is recovering. The Dow Jones industrial average jumped 3.2 percent last week, putting it within 4 points of getting back into positive territory for the year.

An earnings report due out Tuesday from oil company BP PLC will likely be closely watched because of reports that embattled CEO Tony Hayward will step down and the company could take a big charge to cover costs of cleaning up the oil spill in the Gulf of Mexico.

Ahead of the opening bell, Dow Jones industrial average futures rose 6, or 0.6 percent, to 10,392. Standard & Poor’s 500 index futures rose 1.50, or 0.1 percent, to 1,102.10, while Nasdaq 100 index futures rose 3.50, or 0.2 percent, to 1,877.25.

Overseas, Britain’s FTSE 100 fell 0.1 percent, Germany’s DAX index fell 0.5 percent, and France’s CAC-40 fell 0.3 percent. Japan’s Nikkei stock average rose 0.8 percent.

BP shares rose $1.17, or 3.2 percent, to $38.03 in pre-opening trading.

Investors will get one piece of economic data Monday that could affect trading. The Commerce Department is expected to report that sales of new homes rose 6.7 percent in June to an annual rate of 320,000, according to economists polled by Thomson Reuters. The report is due out at 10 a.m. EDT.

The housing market, which helped push the economy into recession, remains sluggish. There was a sharp drop in sales after a government tax credit for home buyers expired at the end of April. There has been concern that the market was being propped up by that credit and it will continue to struggle to recover now that there are fewer incentives for buyers.

Any improvement in new home sales could provide some relief to investors because May’s figures fell to the lowest level since records began being kept in 1963. A smaller than expected drop in sales of previously occupied homes added to stocks rally Thursday.

There are plenty of additional economic reports due out later in the week that could help shape trading. They all lead up to Friday’s first reading on second-quarter domestic gross product, the broadest measure of economic growth.

GDP measures the collective output of the entire economy. The second-quarter report is expected to show just modest growth after stronger growth earlier in the year. The slowdown is forecast because of the withdrawal of government stimulus measures that had helped boost expansion throughout the economy.

Bond prices rose slightly Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged at 3 percent.