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U.S. futures climb on budget hopes; Dow Jones up 0.88%

Published 10/10/2013, 06:46 AM
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Investing.com - U.S. stock futures pointed to a sharply higher open on Thursday, as new hopes for progress on the U.S. budget front strengthened equity markets.

Ahead of the open, the Dow Jones Industrial Average futures pointed to a 0.88% climb, S&P 500 futures signaled a 0.99% jump, while the Nasdaq 100 futures indicated a 0.96% increase.

Hopes that the partial U.S. government shutdown may soon end received a boost from news that House Republican leaders were to hold their first meeting with President Barack Obama since the shutdown began later on Thursday.

President Obama has demanded Republicans raise the U.S. debt ceiling and reopen the government before negotiations on future fiscal policy can take place. The U.S. risks a sovereign debt default if the government borrowing limit is not raised by 17 October.

However, the minutes from the Federal Reserve's September meeting said the decision not to begin tapering stimulus was a "close call," fuelling expectations that the bank will begin to scale back bond purchases in the next few months.

In addition, President Barack Obama announced on Wednesday his nomination of Federal Reserve Vice Chairwoman Janet Yellen to head the U.S. central bank, easing uncertainty over U.S. monetary policy.

Tech stocks were expected to be active, following reports worldwide personal-computer shipments fell in the third quarter, reaching their lowest level for the period since 2008. IBM shares slid 0.26% in extended trading, while Microsoft added 0.15%.

Hewlett-Packard rallied 1.68% in early trading, after suring over 8% on Wednesday, as CEO Meg Whitman said she expects "total revenue to stabilize."

In company news, Men’s Wearhouse rejected a USD2.3 billion cash takeover offer from Jos. A. Bank Clothiers, saying the bid undervalued the company and wasn’t in the best interest of investors.

The company's shares were down 0.47% pre-market, after skyrocketing nearly 28% on Wednesday.

Other stocks likely to remain in focus included Micron, scheduled to report quarterly earnings after the closing bell.

Across the Atlantic, European stock markets were sharply higher. The EURO STOXX 50 surged 1.65%, France’s CAC 40 rallied 1.50%, Germany's DAX climbed 1.33%, while Britain's FTSE 100 jumped 1.01%.
 
During the Asian trading session, Hong Kong's Hang Seng Index slid 0.39%, while Japan’s Nikkei 225 Index gained 1.12%.


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