U.S. stock futures advance as Italy moves to reduce its debt
U.S. stock futures rose, following the biggest rally since March 2009 for the Standard & Poor’s 500 Index, as Italian Prime Minister Mario Monti proposed budget cuts and leaders prepared to meet on Europe’s debt crisis.
Bank of America Corp., JPMorgan Chase & Co. and Morgan Stanley climbed at least 1.5 percent, following an advance in European lenders. Microsoft Corp. and McDonald’s Corp. rose more than 0.9 percent to pace gains among the biggest companies. Transocean Ltd. jumped 4.3 percent after BMO Capital Markets raised its recommendation for the oil rig operator’s shares.
S&P 500 futures expiring in December increased 1.3 percent to 1,259.80 at 7:48 a.m. New York time. The benchmark gauge rallied 7.4 percent last week. Dow Jones Industrial Average futures climbed 139 points, or 1.2 percent, to 12,139.
“It’s pleasing that Italy backed relatively swiftly the new government to put in an austerity measure and demonstrate moving forward in terms of meeting requirements put in place by the European Union,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne.
Italian borrowing costs dropped as Monti will lobby parliament to support a 30 billion-euro ($40 billion) package of austerity and growth measures to trim the euro-region’s second- biggest debt and prevent Italy from sparking the euro’s breakup. German Chancellor Angela Merkel and French President Nicolas Sarkozy will hold talks in Paris today.
American banks rose as a gauge of European lenders in the Stoxx Europe 600 Index advanced 2.5 percent. Bank of America added 3 percent to $5.81. JPMorgan increased 1.5 percent to $32.83. Morgan Stanley jumped 3.1 percent to $16.
Economic Data
Service industries in the U.S. probably expanded in November at the fastest pace in six months, a sign the economy is accelerating in the final months of 2011, economists said before a report today.
Some of the biggest companies gained. Microsoft, the world’s largest software maker, rose 1.2 percent to $25.53. McDonald’s, the biggest restaurant chain, advanced 0.9 percent to $96.53.
Transocean gained 4.3 percent to $44.60 after being raised to “outperform” from “market perform” at BMO Capital Markets. The 12-month share-price estimate is $65.
The S&P 500 may jump 6.9 percent by the end of this month as the benchmark measure completes a year-end rally, according to Peter Beuttell, a technical analyst at MTS Research Ltd. in Bath, England.
‘Under Way’
“If you look around the world, certain indexes didn’t look like they recovered enough, so there is a chance that the initial rallies could repeat,” Beuttell said in a telephone interview today. “That supports the case for another rally pattern, which is under way now.”
The “double zigzag” that began in October will continue this month, with the S&P 500 climbing to a resistance level of 1,330 by the end of the year, Beuttell said. The gauge slipped less than 0.1 percent to 1,244.28 on Dec. 2. The S&P 500 will not drop to its support level of 1,120 to 1,160 until next year. The S&P 500 has rebounded 13 percent from its October low of 1,099.23.
“It’s seasonal for the market to rally,” Beuttell said. “The year-end rally began with the October low.”