Optimism concerning an intact eurozone has been fueling buying interest across the global markets and Wall Street seems to no exception despite it trading up last Friday in anticipation of a Spanish bailout. The U.S. index futures point to a notably higher open. Added to the positive, China reported strong trade data that has served to remove some clouds overhanging the global economy. With very little domestic catalysts to impact markets, Eurozone and its firefighting are likely to be on the radar. Some moderation in mood could be expected following last week's buoyancy.
As of 6:30 am ET, the Dow futures are gaining 96 points and the S&P 500 futures are up 10.50 points, while the Nasdaq 100 futures are adding 21 points.
After taking a slippery stance, Spain finally sought a bailout for its banking system, agreeing to the terms of the bailout package. Spanish banks can now access loans from the EFSF or ESM and has recourse to loans up to 100 billion euros. Though no fiscal riders are attached to the loans, the nation may be required to go about with a fundamental restructuring of its banking system.
U.S. stocks advanced in the week ended June 8th, as traders picked up beaten down stocks on hopes that some help is in the offing. For the week, the Dow Industrials added 3.60 percent and the S&P 500 Index closed up 3.73 percent, while the Nasdaq Composite Index climbed 4.04 percent.
With markets rebounding on stimulus hopes, traders are likely to closely watch the unfolding week's calendar to assess the strength of the domestic recovery. The Commerce Department's retail sales report for May, the New York Federal Reserve's manufacturing survey for June, the Federal Reserve's industrial production report for May, the weekly jobless claims report and the Reuters and the University of Michigan's consumer sentiment index for June are among the key economic reports of the week.
Also featuring in the calendar are the Labor Department's import and export price indexes for May, the producer and consumer price inflation reports for May and the Commerce Department's business inventories report for April. The Treasury Budget for May and the results of the Treasury auctions of 3-year and 10-year notes and 30-year bonds round up the economic events of the week.
In corporate news, Micronetics (NOIZ) announced a deal to be acquired by Mercury Computer Systems (MRCY) for $75.4 million.
Johnson & Johnson (JNJ) said it expects t0o incur a special charge of $600 million in the second quarter to increase its accrual for the potential settlement of previously disclosed civil litigation matter related to RISPERDAL, INVEGA, NATRECOR and Omnicare.
J&J Snack Foods (JJSF) said it has acquired the assets of Kim & Scott's Gourmet Pretzels.
Most Asian markets closed higher, as Spain's decision to seek a bailout perked up risk appetite and led investments into risky assets. The Indian market bucked the uptrend and ended with a moderate loss, while the Australian market remained closed on account of a public holiday.
Japan's Nikkei 255 recovered much of Friday's losses, as traders digested the not-so-disappointing Chinese data and the news out of Spain. The Nikkei average closed up 165.64 points or 1.96 percent at 8,625. Export stocks rode on the retreat by the yen.
Hong Kong's Hang Seng Index rallied 451.29 points or 2.44 percent before closing at 18,954. After trading with appreciable gains for much of the session, India's Sensex plunged sharply in late trading after a S&P report warned that the nation could lose its investment grade rating, given slowing GDP growth and political roadblocks to economic policymaking.
China reported that its trade surplus rose to $18.7 billion in May from $18.4 billion in April, as exports rose 15.3 percent year-over-year, while imports climbed 12.7 percent. The export and import growth were much more than forecast.
Inflation reports released by the Chinese National Statistical Bureau validated a central bank action last week, when rates were reduced to reinvigorate sagging growth. The consumer price index for China rose by 3 percent year-over-year in May compared to a 3.4 rate in the previous month. Economists had expected inflation to cool off to a 3.2 percent.
European stocks are also rallying, with the French CAC 40 Index and the German DAX Index rising 1.64 percent and 1.98 percent, respectively. The U.K.'s FTSE 100 Index is up a more modest 1.10 percent.
In corporate news, U.K.'s Tesco reported a drop in its U.K. same store sales for the first quarter after VAT and petrol were excluded.
by RTT Staff Writer
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