U.S. stock futures jump on European debt deal

NEW YORK — U.S. stock futures jumped and Treasury yields fell Thursday after European leaders agreed on a deal to slash Greece's debt and help protect other weak countries in the region.

The U.S. economy grew between July and September at its fastest rate in a year, and Dow Chemical Co. became the latest big U.S. company to report stronger third-quarter earnings.

Stock markets around the world surged after the European agreement, which leaders hope will prevent their two-year debt crisis from dragging the world into another recession. Banks agreed to take 50 percent losses on the Greek bonds that they hold. Europe will also strengthen a rescue fund to protect Italy and other large European economies.

France's CAC 40 index jumped 5.7 percent, Germany's Dax index rose 5.1 percent and Hong Kong's Hang Seng index rose 3.3 percent. The euro rose above $1.40 after falling below $1.32 in early October.

Less than an hour ahead of the opening of trading, Dow Jones industrial average futures are up 238 points, or 2 percent, to 12,040. S&P 500 index futures are up 30.10, or 2.4 percent, to 1,267.50. Nasdaq 100 futures are up 51, or 2.2 percent, to 2,377.50.

Investors sold U.S. Treasury notes and bonds, an indication they fell less need to own safer investments. The yield on the 10-year Treasury note, which moves in the opposite direction of its price, rose to 2.28 percent from 2.21 percent late Wednesday.

Treasury yields plunged in August and September as worries mounted that Europe's debt problems were worsening and the U.S. economy could fall into another recession.

To be sure, past attempts to contain Europe's two-year debt crisis have proved insufficient. Greece has been surviving on rescue loans since May 2010.

European leaders still have to finalize the details of their latest plan. French President Nicolas Sarkozy spoke with Chinese President Hu Jintao amid hopes that cash-rich countries like China can contribute to the European rescue.

Worries about Europe's debt crisis and a weak U.S. economy dragged the S&P 500 down 19.4 percent between April 29 and Oct. 3. That put it on the cusp of what's called a bear market, which is a 20 percent decline.

But reports on the U.S. economy have improved since then. The economy grew at a 2.5 percent annual rate from July through September on stronger consumer spending and business investment. That nearly doubled the economy's 1.3 percent growth in the earlier quarter and helps calm worries about another pending recession.

The unemployment rate has remained at or above 9 percent since April, but slightly fewer Americans joined the unemployment line last week.

Dow Chemical rose 3 percent in premarket trading after its profit last quarter rose 59 percent on strong sales growth from Latin America.

Marlboro maker Altria Group Inc. rose 1.4 percent ahead of the bell after its third-quarter profit rose 4 percent on higher prices for its cigarettes.

Akamai Technologies Inc., whose products help speed the delivery of online content, surged 14 percent in premarket trading. Its third-quarter revenue and earnings beat analysts' expectations.

Homebuilder PulteGroup Inc. rose 7.3 percent after its reported a smaller third-quarter loss and higher revenue.

Avon Products Inc. fell 12 percent after it said third-quarter net income dropped 1 percent and withdrew its revenue forecast for the year.