US Stock Futures Advance, Following European Markets’ Debt Hopes
–Stock futures rally on hopes for action to resolve euro-zone crisis
–Europe markets erase losses to turn sharply higher
–Gold futures fall to eight-week low
–Boeing gains on Dreamliner delivery, Clorox, Eastman Kodak decline
By Brendan Conway and Tomi Kilgore
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- U.S. stock futures pointed to a higher open, mirroringthe turnaround in overseas markets, as investors weighed signs of furtherefforts to bolster European markets and to contain the continent’s sovereign-debt crisis.
About an hour before the opening bell, Dow Jones Industrial Average futuresclimbed 113 points, or 1.1%, to 10810. The Dow staged its biggest weekly pointdrop given that October 2008 last week, as investors’ worries of a Greek-debt defaultand further turmoil in global markets spurred a broad selloff in stocks andcommodities, and also drove Treasury yields to historic lows.
Standard & Poor’s 500-stock index futures rose 15 points, or 1.3%, to 1145 andNasdaq 100 futures advanced 19 points, or 0.8%, to 2221. Changes in stockfutures don’t always accurately predict stock moves after the opening bell.
European markets turned broadly higher, with the Stoxx Europe 600 erasingearlier losses of as much as 1.2% to trade up 2.4%, on hopes for coordinatedaction to resolve the euro-zone debt crisis, including the improve of a bailoutfund along with a possible interest rate cut by the European Central Bank.
ECB executive board member Lorenzo Bini Smaghi on Sunday became the first ECBofficial to publicly throw his weight behind a euro-zone bailout fund patternedafter U.S. efforts to stem the 2008 financial crisis. It would be a moreaggressive approach towards the sovereign-debt crisis than what European leaders havepursued thus far.
European traders also attributed the turnaround in stock prices there tocomments from ECB Governing Council member Ewald Nowotny that the central bankcan’t rule out a reduction in interest rates. “The ECB never pre-commits, andrate cuts cannot be excluded. It all depends on the developments ahead,” Nowotnysaid in an interview with Market News International.
Investors appeared to shrug off another sign of the weakening U.S. economyafter the Federal Reserve Bank of Chicago stated its National Activity Indexturned sharply negative in August.
Asian bourses fell, however, with China’s Shanghai Composite shedding 1.6% andJapan’s Nikkei dropped a lot more than 2%.
Gold futures fell to an eight-week low and traded below $1,627 an ouncerecently. Crude-oil futures rose to above $80 a barrel. The U.S. dollar fellslightly against the yen and the euro.
On the economic calendar, data on new home sales in August is scheduled forrelease at 10 a.m. EDT, and a reading on manufacturing activity in the Dallasarea is due out at 10:30 a.m., EDT.
In corporate news, shares of Boeing rose two.5% in premarket trading after theblue chip aerospace and defense company delivered its first 787 Dreamliner toJapan’sAll Nippon Airways on Sunday.
Clorox slumped five.8% after billionaire investor Carl Icahn withdrew his 11nominees to replace the household-product company’s board after determining hisplan to sell the company would be opposed by shareholders at this time.
Eastman Kodak dropped 18% after the film company said late-Friday that itborrowed $160 million against its credit line, which raised fears of a cashshortage.
Mela Sciences far more than doubled in premarket activity after the companyreceived an approvable letter from U.S. Food and Drug Administration for itsMelaFind device used to diagnose melanoma.
-By Brendan Conway, Dow Jones Newswires; (212) 416-2670; brendan.conway@dowjones.com
(Finish) Dow Jones Newswires 09-26-110856ET Copyright (c) 2011 Dow Jones & Company, Inc.
Posted: October 10th, 2011 under Market News.