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Libya and Oil Dominate Early Stock Market Trading

March 3, 2011

U.S. stock index futures have reversed higher off overnight lows after reports that Venezuelan President Hugo Chavez would seek to negotiate a peace deal in Libya. Crude oil dropped on that news, and European markets shot straight up.

That move helped send the futures as high as 1 percent at one point. Crude has recovered most of its inital losses, but many stock prices have remained higher.

Asian markets finished mixed but mostly positive. Volume is light in U.S. equity trading ahead of economic reports today and the much-anticipated Employment Situation report tomorrow morning.

The European Central Bank is widely expected to lay the foundation for a future rate hike when it meets today, without altering rates immediately. Currency markets are far less volatile today ahead of that meeting, with no particular currency at extremes. The dollar is currently flat.

Commodities are higher for the most part, with agricultural prices particularly strong. The U.N. Food and Agriculture Organization said its Food Price Index reached a record high, adding that high oil prices would lead to further cost increases for food. Conditions on crops and yields for this year will not be available until April, though the FAO said it expects a small increase in wheat production over 2010 levels.

In stock-specific news, Heinz reported that results were better than consensus for its second quarter but reduced the lower band of the expected range of full-year earnings.

Big Lots beat its consensus earnings per share by $0.08 and guided higher for fiscal 2011, sending its stock up more than 3 percent.

Zumiez reported much-stronger sales in February last night after the close, pushing the stock higher by nearly 6 percent this morning.

Kroger, Novell, and Progressive are also reporting earnings today. Beyond those names, there are no S&P 500 companies scheduled to announce results until Tuesday.

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