* Netflix blames Amazon for outage
* Obama heads back to Washington after vacation
* Futures up: Dow 17 pts, S&P 3 pts, Nasdaq 3.25 pts
By Chuck Mikolajczak
NEW YORK, Dec 26 U.S. stock index futures edged
higher on Wednesday, indicating the S&P 500 may stem its worst
two-day drop since mid-November, ahead of the resumption of
"fiscal cliff" negotiations.
U.S. President Barack Obama is cutting short his Hawaiian
holiday to leave for Washington on Wednesday to address the
unfinished negotiations with Congress.
Obama is due to arrive in Washington on Thursday to resume
talks on the cliff, a sharp rise in taxes and deep spending cuts
due to begin on Jan. 1 that could tip the U.S. economy into
"This is what we've come to - the President might get on a
plane today and this is what the markets might react to," said
Kim Forrest, senior equity research analyst at Fort Pitt Capital
Group in Pittsburgh.
"It's all about the fiscal cliff."
A Republican plan that failed to gain traction last week
triggered the recent decline in the S&P 500, highlighting
market sensitivity to headlines centered around the talks.
Investors will also look to housing data for signs of
improvement in that sector of the economy, with the S&P
Case/Shiller Home Price Index for October expected at 9 a.m.
Housing data has shown modest improvement in recent months,
and continued strength could help support the sagging economy.
"The data is two months old, so it's interesting, but I
don't know that people will react to it given these other more
timely events," said Forrest.
S&P 500 futures rose 3 points and were slightly above
fair value, a formula that evaluates pricing by taking into
account interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures gained 17
points, and Nasdaq 100 futures climbed 3.25 points.
The benchmark S&P index is up 13.4 percent for the year, and
has recouped nearly all of the losses suffered in the wake of
the U.S. elections, when the fiscal cliff concerns moved to the
forefront of investors' focus.
China's Sinopec Group and ConocoPhillips
will research potentially vast reserves of shale gas in
southwestern China over the next two years, state news agency
An outage at one of Amazon.com Inc's web service
centers hit users of Netflix Inc's streaming video
service on Christmas Eve and was not fully resolved until
Christmas Day, a spokesman for the movie rental company said on
In Asian markets, the Nikkei moved to a new nine-month high
but shares elsewhere in the region were capped in thin holiday
trade, with investors focusing on the fate of U.S. negotiations
to avert a budget crunch looming at the end of the year.