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U.S. futures higher on Spain hopes; Dow Jones up 0.67%

Published 06/11/2012, 07:00 AM
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Investing.com - U.S. stock futures pointed to a higher open on Monday, as market sentiment found broad support after the announcement of a European bailout for Spain and its ailing banking sector. 

Ahead of the open, the Dow Jones Industrial Average futures pointed to a rise of 0.67%, S&P 500 futures signaled a 0.68% increase, while the Nasdaq 100 futures indicated a 0.67% gain.

On Saturday, the European Union agreed to lend Spain as much as EUR100 billion that Madrid will use to recapitalize its banks.

But investors remained cautious as details of the Spanish bailout agreement remained unclear, with the exact amount Spain is to receive still to be decided, after the results of independent banking audits are published later this month.

Meanwhile, uncertainty over the outcome of a Greek general election on June 17, which could determine the course of the country’s future in the euro zone, also weighed.

Financial stocks were expected to be active as Goldman Sachs was reportedly close to striking a deal over the sale of its hedge fund administration business State Street Corp. According to the Financial Times, the move would create the largest administration services provider to hedge funds worldwide.

Meanwhile, French set-top maker Technicolor rejected a revised offer from a JPMorgan Chase investment fund for a 30% stake for EUR179 million, opting instead for an earlier, lower offer which it said was better structured.

In the Internet sector, LinkedIn Corp., criticized for inadequate network security after hackers exposed millions of its users' passwords, said on Saturday it had finished disabling all affected accounts and did not believe other members were at risk.

Elsewhere, airline companies were also likely to be in focus, after American Airlines said it still plans to exit bankruptcy at the end of this year but is not concentrating on a merger despite pressure from unions to forge a combination with US Airways.

In addition, Boeing was expecting to reach a cumulative total of 1,000 orders for the revamped 737 MAX aircraft by the end of 2012 and will defend a 50% share of the market for such narrow body jets against European rival Airbus.

Turkish Airlines was reportedly studying a possible purchase of revamped medium-haul jets being offered by Airbus or Boeing.

Also in company news, General Electric Co. announced its decision to invest USD900 million in Turkish infrastructure development projects over the next three years.

Across the Atlantic, European stock markets were sharply higher. The EURO STOXX 50 surged 1.99%, France’s CAC 40 jumped 1.59%, Germany's DAX rallied 1.83%, while Britain's FTSE 100 advanced 0.96%.

During the Asian trading session, Hong Kong's Hang Seng Index surged 2.4%, while Japan’s Nikkei 225 Index jumped 2%.

Also Monday, markets shrugged off official data showing that Chinese inflation, industrial output and retail sales disappointed expectations in May, after unexpectedly strong import data eased concerns over a ‘hard landing’ in the world’s second largest economy.


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