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U.S. futures point to higher open ahead of FOMC; Dow up 0.6%

Published 03/13/2012, 07:36 AM
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Investing.com - U.S. stock futures pointed to a broadly higher open on Tuesday, tracking strong gains in Asian and European equities as investors turned their attention to a Federal Reserve policy meeting later in the day after euro zone finance ministers signed off on a second bailout for Greece.

Ahead of the open, the Dow Jones Industrial Average futures pointed to a gain of 0.6%, S&P 500 futures signaled a 0.7% increase, while the Nasdaq 100 futures indicated a 0.75% advance.

Market sentiment firmed after euro zone finance ministers said that Greece would receive formal approval for its second bailout later this week.

Head of the Eurogroup of finance ministers, Jean-Claude Juncker, said Monday there was "no doubt" that a second bailout for Greece, worth EUR130 billion, would be approved later in the week.

The Eurogroup meeting continues Tuesday, with ministers likely to discuss Spain’s debt situation, demanding it aim for a tougher deficit target this year in order to get back on target in 2013.

Traders now shifted their attention to the outcome of a Federal Reserve policy meeting later in the day. The meeting comes after Friday’s robust U.S. employment data, which showed that the U.S. economy added 227,000 jobs in February, beating expectations for a 210,000 gain.

The upbeat data diminished expectations for a fresh round of asset purchases by the Federal Reserve to help stimulate economic growth.

However, the Wall Street Journal reported last week that the Fed is considering a strategy that would allow it to undertake another round of bond buying, while lowering the risk of inflation.

Shares in the financial sector were higher in pre-market trade, with Bank of America shares up 1%, Citigroup rising 1.6%, while U.S.-listed shares of Deutsche Bank climbed 2.1%.

Raw material producers advanced, tracking metal prices higher on the New York Mercantile Exchange. Freeport McMoran Copper & Gold saw shares gain 1%, while aluminum producer Alcoa jumped 1.75%.

Shares in retailers, such as Best Buy and Macy’s could be active ahead of the release of government data on retail sales for February.

Clothing retailer Urban Outfitters tumbled 5.35% ahead of the open after reporting lower-than-expected fourth quarter earnings after Monday’s closing bell.

Yahoo shares could be active after saying late Monday that it is suing social media website Facebook in a California court, alleging the infringement of multiple patents.

Across the Atlantic, European stock markets were broadly higher, with indices extending gains after data showed that German economic sentiment improved to the highest level since June 2010 this month.

The EURO STOXX 50 rallied 1.05%, France’s CAC 40 jumped 1.1%, Germany's DAX surged 1%, while Britain's FTSE 100 advanced 0.9%.

During the Asian trading session, Hong Kong's Hang Seng Index added 1%, while Japan’s Nikkei 225 Index eased up 0.1%.

The Nikkei trimmed gains after the Bank of Japan refrained from boosting its asset buying program after unexpectedly adding JPY10 trillion in stimulus last month.

Also Tuesday, the U.S. was to publish government data on business inventories.

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