U.S. Stock Futures Rise as Miners Rally; Freeport, Newmont Gain

By Michael Patterson and Eric Martin

Aug. 18 (Bloomberg) -- U.S. stock-index futures rose, indicating the Standard & Poor's 500 Index may extend a three- week advance, as mining shares rallied on higher metals prices and oil retreated.

Freeport-McMoRan Copper & Gold Inc. and Newmont Mining Corp. gained as gold and silver gained. UnionBanCal Corp., California's second-largest bank, advanced after Mitsubishi UFJ Financial Group Inc. raised its takeover bid by 17 percent. Fannie Mae and Freddie Mac fell more than 8 percent, limiting the market's gains, following a report that the government may wipe out shareholders of the biggest U.S. providers of mortgage financing.

S&P 500 futures expiring in September added 3.1 points, or 0.2 percent, to 1,302.80 as of 8:34 a.m. in New York. Dow Jones Industrial Average futures rose 25, or 0.2 percent, to 11,688. Nasdaq-100 Index futures gained 4.25, or 0.2 percent, to 1,969.75. European and Asian shares climbed as energy and mining companies rose.

The S&P 500 has dropped 12 percent this year as the biggest U.S. housing slump since the Great Depression slowed consumer spending and spurred turmoil in mortgage markets that saddled banks with more than $500 billion of losses. The benchmark index for U.S. equities has rallied 6.9 percent from an almost three- year low on July 15.

Stocks advanced on Aug. 15, sending the S&P 500 to a third weekly gain. MBIA Inc. and Ambac Financial Group Inc. climbed after the largest bond insurers had their credit ratings affirmed and a report showed unexpected growth in New York manufacturing.

Gold, Silver Gain

Gold advanced as much as 2.3 percent as the dollar declined against the euro, bolstering demand for the metal as an alternative investment. Silver gained up to 4.1 percent.

Freeport-McMoRan, the Phoenix-based producer of gold and copper, added $1.51 to $85.90. Newmont, the biggest U.S. bullion producer, increased 9 cents to $41.60.

UnionBanCal gained $7.76 to $73.25. Mitsubishi UFJ increased its bid to $3.5 billion to gain full control of the California bank that dodged the subprime lending crisis. Mitsubishi UFJ offered $73.50 a share for the 35 percent of UnionBanCal it doesn't already own.

Fannie Mae lost 70 cents, or 8.9 percent, to $7.21 and Freddie Mac dropped 49 cents, or 8.4 percent, to $5.36. The U.S. Treasury will probably recapitalize the firms, wiping out stockholders, Barron's reported.

Hershey Co. dropped $3.61 to $38.01. The largest U.S. chocolate maker said it expected price increases to curb sales and profit growth in 2009. Hershey boosted U.S. prices by an average 10 percent to help counter rising cocoa, packaging, energy and shipping expenses. Commodity costs will probably climb twice as fast in 2009 as in 2008, and hedging and marketing expenses will also advance, the company said.

To contact the reporters on this story: Michael Patterson in London at mpatterson10@bloomberg.net; Eric Martin in New York at emartin21@bloomberg.net.