With traders reacting positively to the latest news out of Europe, stocks are likely to move to the upside in early trading on Friday. The major index futures are currently pointing to a sharply higher open, with the Dow futures up by 194 points.
The substantial upward momentum for the markets comes after European Council President Herman Van Rompuy announced that European leaders have agreed to spend 120 billion euros on a package of measures to stimulate growth and create jobs.
Van Rompuy said the leaders also agreed to permit the European Financial Stability Facility and the European Stability Mechanism to directly recapitalize ailing banks after a single European banking regulator is commissioned.
Additionally, the leaders agreed that ESM loans to Spanish banks will not have senior creditor status. The European Central bank is set to act as an agent for the rescue funds in market operations.
Peter Boockvar, managing director at Miller Tabak, said, "The next question is whether the ESM/EFSF will have enough capital and assuming they don't, will the ECB chip in by giving it a bank license thus leveraging its size. That is yet to be determined."
"For now, party on and turn that hour glass over as more time has been bought but only the symptoms are being fought as the underlying disease of excessive debt and lack of growth still remains," he added.
In U.S. economic news, the Commerce Department recently released a report showing that personal income rose by 0.2 percent in May, matching the increase seen in the previous month. Economists had expected income to increase by 0.3 percent.
The report also showed that personal spending came in unchanged in May after edging up by a revised 0.1 percent in April. Spending had been expected to come in unchanged compared to the 0.3 percent increase originally reported for the previous month.
Despite the strong upward momentum for the broader markets, shares of Research in Motion (RIMM) are likely come under pressure in early trading after the BlackBerry maker reported weaker than expected first quarter results and provided disappointing guidance.
Athletic apparel giant Nike (NKE) could also see early weakness after reporting fourth quarter results that trailed expectations.
While stocks saw significant weakness throughout much of the trading day on Thursday, the markets staged a significant recovery attempt in the final hour of trading. The major averages climbed well off their worst levels of the day but still closed in negative territory.
The tech-heavy Nasdaq underperformed its counterparts, ending the session down 25.83 points or 0.9 percent at 2,849.49. The Dow edged down 24.75 points or 0.2 percent to 12,602.26, while the S&P 500 slipped 2.81 points or 0.2 percent to 1,329.04.
In overseas trading, stock markets across the Asia-Pacific region showed strong moves to the upside during trading on Friday. Japan's Nikkei 225 Index advanced by 1.5 percent, while Hong Kong's Hang Seng Index surged up by 2.2 percent.
The major European markets have also moved sharply higher on the day. The U.K.'s FTSE 100 Index has jumped by 2 percent, while the German DAX Index and the French CAC 40 Index are soaring 3.5 percent and 3.9 percent, respectively.
Crude oil futures are jumping $3.31 to $81 a barrel after tumbling $2.52 to $77.69 a barrel on Thursday. Gold futures are climbing $42.10 to $1,592.50 an ounce. In the previous session, the precious metal fell $28 to $1,550.40 an ounce.
On the currency front, the U.S. dollar is trading at 79.41 yen compared to the 79.45 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.2673 compared to yesterday's $1.2443.
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