US pre-open: Stocks set for a rebound as oil prices advance

Stocks on Wall Street were on track for a rebound as oil prices rallied and European indices gained ground.

“US stocks look set for a positive open on Wednesday as crude oil prices rise ahead of DOE weekly inventory figures with earnings to be reported by Twitter co-founder Jack Dorsey’s second company Square,” said CMC Markets analyst Jasper Lawler.

At 1215 GMT, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were all up 0.6%.

At the same time, oil prices advanced as investors awaited the US Energy Information Administration’s latest estimates of oil production later in the day. West Texas Intermediate was up 1.5% to $37.04 a barrel and Brent crude was 1.7% firmer at $40.31.

Europe’s main indices were all firmly in the black as investors looked to Thursday’s European Central Bank rate announcement. Market participants are pricing in a 10 basis points cut to the deposit rate, an extension of asset purchases and maybe even the introduction of tiered interest rates.

On the corporate front, natural pet food company Blue Buffalo Pet Products surged in pre-market trade as its fourth quarter results released late on Tuesday beat analysts’ expectations.

Valeant Pharmaceuticals was also on the foot on news the company is in talks about adding new board members.

Pfizer Inc was in focus after the pharmaceutical company announced that it has entered into a $5bn accelerated repurchase programme with Goldman Sachs to be settled during the second quarter of 2016.

Chipotle was also likely to be in the spotlight after one of its restaurant in Massachusetts was shut down as four employees fell ill, possibly from norovirus.

In currencies, the dollar was 0.1% weaker versus the pound and the yen but 0.3% firmer against the euro

Data released earlier by the Mortgage Bankers Association showed total mortgage application volume in the US rose 0.2% last week in seasonally-adjusted terms. This compared to a 4.8% drop the previous week.

On the year, mortgage application volumes were up 20%.

Still to come on the macroeconomic calendar, wholesale inventories are due for release at 1500 GMT.