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US STOCKS-Futures gain on renewed hope for Fed action

Published 10/11/2010, 07:48 AM
Updated 10/11/2010, 07:52 AM

By Chuck Mikolajczak

NEW YORK, Oct 11 (Reuters) - U.S. stock index futures rose on Monday as expectations intensified the U.S. Federal Reserve would take further action to bolster the economic recovery.

* The dollar slipped after world financial leaders failed to reach agreement on currency imbalances, leaving the U.S. Fed set to pursue loose monetary policy to support the ailing U.S. economy. The dollar and equities have been inversely correlated as investors leave the perceived safety of the greenback and put money into stocks.

* "Anticipation of additional Fed easing is leading to the weaker U.S. dollar, which is continuing to fuel equity speculation," said Andre Bakhos, director of market analytics at Lek Securities in New York.

* Still, there were worries over the monetary tightening in China. The government of the world's No. 2 economy has raised reserve requirements for six large commercial banks on a temporary basis in a move to drain cash from the economy but avoid overtightening, sources told Reuters.

* The dollar was affected by discord in international currency policies after the International Monetary Fund's member countries failed to agree on a concrete plan to tackle global imbalances at multilateral meetings over the weekend.

* S&P 500 futures gained 3 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures advanced 22 points, and Nasdaq 100 futures rose 4 points.

* In a deal with Chesapeake Energy Corp, CNOOC Ltd, China's top offshore oil producer, will pay $1.1 billion for a stake in a U.S. shale oil and gas field, testing the market for the first time since its 2005 failed bid for Unocal. Chesapeake gained 4.8 percent to $24.15 in premarket trade.

* Chinese solar wafer maker LDK Solar Co Ltd raised its outlook for third-quarter revenue and solar wafer shipments on strong demand for solar power products. The stock gained 6.1 percent to $10.40.

* Microsoft Corp is set to unveil a new line of phones running its Windows software as it tries to take business away from Apple Inc's iPhone and Google Inc's Android system in the fast-growing market for smartphones. The phones will initially be available on AT&T Inc's network.

* European shares edged up early Monday, tracking Friday gains on Wall Street after weaker-than-expected U.S. jobs data reinforced hopes the Fed would inject fresh money into the economy. Asian stocks also rose, with Shanghai composite closing up 2.5 percent.

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