MW: Stock futures point to opening climb on Fed move
By Steve Goldstein & Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stock futures on Tuesday pointed to a higher start, halting the bashing that pushed the major indexes to four-year lows, after the Federal Reserve said it would start buying commercial paper to ease frozen credit markets.
Ahead of the opening bell, the Fed announced its unprecedented move to restart a market that has virtually shut down in recent weeks.
Stock index futures shed their losses in the wake of the central bank's move, turning sharply higher.
Futures for the Dow Jones Industrial Average were recently up 143 points at 10,107.
Futures for the S&P 500 gained 19.8.points to 1,073.10, and those for the Nasdaq 100 gained 28.75 to 1,435.25.
U.S. and global stocks slumped on Monday, with the Dow falling below the 10,000 mark for the first time since Oct. 26, 2004. Emerging markets were especially slammed, with Russian stocks leading the sell-off. Read Emerging Markets story. After falling as much as 800 points during the session - the largest intra-day point decline in the index's history - the Dow industrials ended off 369 points.
A surprisingly large rate cut from Australia on Tuesday reignited hopes for coordinated measures by central banks other than Sydney. But the Federal Reserve announced a fresh dollar auction with overseas counterparts but no rate cut. See details.
The Bank of England is expected to cut rates on Thursday, while the Bank of Japan opted to keep rates on hold.
Both Federal Reserve Chairman Ben Bernanke and European Central Bank President Jean-Claude Trichet have speeches scheduled, and the Fed is due to release minutes from the last interest-rate setting meeting.
Oil futures rose more than $4 a barrel, and gold futures climbed $22 an ounce. The euro moved off lows.
Overseas markets were mixed and volatile. The ASX All Ordinaries ended over 1% higher after the rate cut, while the Nikkei 225 dropped 3%. The FTSE 100 traded 3% higher in London.
Bank of America Corp. fell 10% in pre-open trade after reporting a 68% profit fall, slashing its dividend and saying it will raise up to $10 billion in common stock.
British banks including the Royal Bank of Scotland dropped sharply, as the BBC reported that RBS, Lloyds TSB and Barclays want injections of as much as 15 billion pounds each from the U.K. government. The banks denied they requested capital.
Advanced Micro Devices Inc , the Sunnyvale, Calif., chipmaker, plans to spin off its manufacturing operations to a new joint venture with an Abu Dhabi investment firm. AMD shares shot up 27% in pre-open trade.
After the close, Alcoa will kick off earnings season, with analysts increasingly nervous about the report the aluminum giant will hand is amid dropping metals prices and the global financial crisis. See related story.