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U.S. futures surge on EU debt deal; Dow Jones up 1.78%

Published 10/27/2011, 07:46 AM
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Investing.com - U.S. stock futures pointed to a sharply higher open on Thursday, as market sentiment recovered after European leaders announced fresh measures to tackle Greece's debt crisis and expand the region's bailout fund.

Ahead of the open, the Dow Jones Industrial Average futures pointed to a rise of 1.78%, S&P 500 futures signaled a 2.14% surge, while the Nasdaq 100 futures indicated a 2.12% jump.

Risk sentiment was boosted after European leaders reached an agreement with private banks on a voluntary 50% reduction of Greece's debt. The writedown will reduce Greece’s debt burden from 160% of GDP to a more sustainable 120% by 2020.

Leaders also agreed to expand the firepower of the euro zone's bailout fund, the European Financial Stability Facility.

The financial sector led gains as shares in Goldman Sachs surged 5.86% and JP Morgan jumped 2.06%, while Bank of America and Citigroup advanced 2.01% and 0.81%.

The largest aluminum producer in the U.S. Alcoa also posted strong gains, tracking a rise in base metals, with shares climbing 2.17% as did shares in oil and gas giant, Chevron.

Meanwhile, Visa, the world's biggest payments network saw shares climb 1.48%, after reporting a 14% increase in fourth-quarter profit, exceeding analysts' expectations, as credit-card spending rose faster than debit.

Elsewhere, airplane maker Boeing extended Wednesday's gains, with shares shooting up 4.46%, after higher-than-expected earnings of USD1.46 per share, and after the company's 787 Dreamliner made its first commercial flight.

On the downside, telecommunications firm Research in Motion saw shares plummet 6.96%, as it faces a rash of consumer lawsuits following its recent four-day BlackBerry outage.

Other stocks in focus included oil major Exxon Mobil and pharmaceutical firm Bristol-Myers Squibb, due to report quarterly results later in the day.

Across the Atlantic, European stock markets were sharply higher. The EURO STOXX 50 surged 5.24%, France’s CAC 40 jumped 5.38%, Germany's DAX soared 4.57%, while Britain's FTSE 100 posted a 2.66% gain.

During the Asian trading session, Hong Kong's Hang Seng Index surged 3.2%, while Japan’s Nikkei 225 Index jumped 2.05%.

Later in the day, the U.S. was to publish preliminary data on third quarter GDP, as well as the GDP price index, the broadest measure of inflation. The country was also to publish its weekly data on initial jobless claims.

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