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US STOCKS-Futures rise on Bank of Japan move, ISM data due

Published 10/05/2010, 07:25 AM
Updated 10/05/2010, 07:28 AM
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* Bank of Japan to pump more funds into economy

* Dollar falls, lifting commodity prices

* ISM services index on tap

* Futures up: Dow 17 pts, S&P 2.3 pts, Nasdaq 6.25 pts

By Ryan Vlastelica

NEW YORK, Oct 5 (Reuters) - U.S. stock index futures rose on Tuesday as global stimulative measures reassured investors that governments were taking protective steps against economic weakness.

* The Bank of Japan will pump more funds into the struggling economy and keep interest rates close to zero, surprising markets and stealing a march on the U.S. Federal Reserve in providing a fresh dose of stimulus. The Nikkei jumped 1.5 percent, while the yen retreated.

* The dollar index hit an 8-1/2-month low on Tuesday as demand for the euro put the greenback under broad selling pressure.

* Fed Chairman Ben Bernanke said the Fed's asset purchases lowered borrowing costs and helped the economy, and that more buying could further ease conditions. The Fed bought $1.7 trillion in mortgage-related and Treasury bonds after cutting benchmark rates to near zero to combat the financial crisis and help the economy pull out of a severe recession.

* S&P 500 futures rose 2.3 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 added 17 points and Nasdaq 100 futures rose 6.25 points.

* Investors looked ahead to September's Institute for Supply Management's non-manufacturing index, which is expected to be largely unchanged from the prior month but still in expansionary territory. The business activity expectation is 54.0, compared with 54.4 last month. The PMI figure is seen at 52.0, up from 51.5 last month. Anything above 50 represents expansion.

* The services sector makes up the bulk of the economy, and traders hope for signs of strength a week after the ISM's manufacturing index showed the sector slowed in September.

* Fast food chain operator Yum Brands Inc is on tap to report third-quarter results. The earnings season unofficially kicks off later this week with Alcoa Inc's results after the market close on Thursday.

* Dow component Boeing Co may put off a decision on whether to redesign its hot-selling narrow-body 737 aircraft until next year, a senior executive said.

* Australia's central bank left interest rates steady for a fifth month on Tuesday, though it said higher rates would likely be needed eventually to contain inflation.

* Oil futures rose nearly 1 percent, building on a week of gains after Japan lowered rates and the dollar fell, while gold hit a record high above $1,326 an ounce.

* Moody's may cut Ireland's credit rating again, pointing to the huge bill for cleaning up its banks, a weak recovery and rising borrowing costs.

* Chevron Corp plans to resume quarterly stock buybacks of up to $1 billion as the No. 2 U.S. oil group gains confidence about its finances.

* Fertilizer maker Mosaic Co's quarterly profit nearly tripled but the results missed expectations and the stock fell after hours.

* Gymboree Corp hired Goldman Sachs to auction off the children's apparel retailer. The price tag could reach more than $1 billion, the New York Post reported.

* U.S. stocks fell Monday as investors used mixed economic data and worries about euro zone debt as a catalyst to shed long positions.

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