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U.S. futures add to gains after spending data; Dow jumps 1%

Published 08/29/2011, 08:42 AM
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Investing.com – U.S. stock futures pointed to a broadly higher open on Monday, as appetite for riskier assets remained supported after comments from Federal Reserve Chairman Ben Bernanke and after the U.S. east coast escaped major damage from Hurricane Irene over the weekend.      
 
Ahead of the open, the Dow Jones Industrial Average futures pointed to a gain of 1%, the S&P 500 futures indicated a rise of 1.15%, while the Nasdaq 100 futures rose 1.1%.
 
Stock futures added to gains after official data showed that U.S. personal spending rose more-than-expected in July, climbing 0.8%, while personal income rose 0.3%, slightly below expectations for a 0.4% gain.   

Sentiment remained upbeat after Fed Chair Bernanke said Friday the central bank “has a range of tools that could be used to provide additional monetary stimulus” to bolster economic growth.

The comments boosted shares in the financial sector, which were also supported by strong gains in their European counterparts.

The largest U.S. lender Bank of America saw shares climb 3.1%, Citigroup shares traded 2.2% higher, while JP Morgan Chase added 1.6%.

Meanwhile, U.S.-listed shares of Greece’s largest bank National Bank of Greece soared 41.3% on news of a pending merger between the country’s second and third largest banks, EFG Eurobank Ergasias and Alpha Bank.

Insurers were also higher after Hurricane Irene was downgraded from a Category 1 hurricane to a tropical storm before hitting the U.S. Northeast region. Kinetic Analysis lowered its forecast for losses resulting from the storm to USD2.6 billion from USD14 billion it anticipated on Friday.

The second largest U.S. Allstate saw shares gain 2%, while Travels Companies advanced 2.6%.  

Across the Atlantic, European stock markets were up sharply as shares in the financial sector led gains. The EURO STOXX 50 jumped 1.9%, France’s CAC 40 rose 1.95%, Germany's DAX gained 1.55%, while Britain's FTSE 100 remained closed for a holiday.               

During the Asian trading session, Hong Kong’s Hang Seng Index climbed 1.45%, while Japan’s Nikkei 225 Index rose 0.6%, as sentiment was boosted after the country’s Finance Minister Yoshihiko Noda was elected as next prime minister. 

Later in the day, the U.S. is to release industry data on pending home sales.

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