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U.S. futures sharply higher on Summers news; Dow Jones up 1.08%

Published 09/16/2013, 06:47 AM
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Investing.com - U.S. stock futures pointed to a sharply higher open on Monday, as news that Lawrence Summers withdrew from the contest to succeed Ben Bernanke as the next chairman of the Federal Reserve boosted risk sentiment.

Ahead of the open, the Dow Jones Industrial Average futures pointed to a 1.08% jump, S&P 500 futures signaled a 1.10% rally, while the Nasdaq 100 futures indicated a 1.05% gain.

Investor confidence strengthened after Lawrence pulled out of the race to be the next Fed chairman, easing investor concerns that he would roll back economic stimulus measures more aggressively than his main rival for the post, Janet Yellen.

Market participants were also awaiting Wednesday’s outcome of the upcoming Fed meeting, after a recent series of lukewarm U.S. data raised doubts over whether the central bank will start to taper its USD85 billion-a-month bond buying program.

The retail sector was expected to be active, after Hennes & Mauritz said sales at stores open for at least a year rose 4% on the year in August, sending shares up 3.61% in early European trade.

KKR & Co. was also likely to be in focus, as the private equity firm was said to be competing with Abraaj Group to buy a majority stake in Saudi Arabian restaurant business Kudu.

Among tech stocks, Apple shares were up 0.47% in pre-market trade amid reports the use of fingerprint scanning in the company's new iPhone models could lead more device makers to adopt the authentication method as a successor to passwords.

The news came after recent revelations that the U.S. National Security Agency has intercepted Internet communications and cracked encryption codes on devices including the iPhone.

Other stocks likely to remain in focus included Twitter, after the social media messaging site announced last week it had filed for an initial public offering (IPO).

Across the Atlantic, European stock markets were sharply higher. The EURO STOXX 50 climbed 0.81%, France’s CAC 40 gained 0.89%, Germany's DAX rallied 1.19%, while Britain's FTSE 100 advanced 0.80%.

During the Asian trading session, Hong Kong's Hang Seng Index jumped 1.47%, while Japan’s Nikkei 225 Index remained closed for a national holiday.

Later in the day, the U.S. was to publish the Empire state manufacturing index, in addition to data on industrial production and the capacity utilization rate.


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