U.S. Stock Futures Climb as Citigroup Rallies 41%; Exxon Falls

By Michael Patterson

Nov. 24 (Bloomberg) -- U.S. stock-index futures climbed as the government’s $306 billion guarantee of troubled Citigroup Inc. assets overshadowed a retreat in energy shares on lower oil.

Citigroup jumped 41 percent in Germany after the Treasury Department also agreed to inject $20 billion into the bank. JPMorgan Chase & Co. added 5 percent and Bank of America Corp. rose 6.1 percent as the guarantee eased concern that a flight of depositors might destabilize Citigroup, which has $2 trillion of assets. Exxon Mobil Corp., the biggest U.S. energy company, dropped 1 percent as oil fell below $50 a barrel.

Futures on the Standard & Poor’s 500 Index expiring in December added 1.5 percent to 803.80 at 9:47 a.m. in London after earlier falling as much as 1.1 percent. Dow Jones Industrial Average futures climbed 0.8 percent to 8,099 and Nasdaq-100 Index futures increased 1 percent to 1,101.75.

“With Citigroup hanging in the low single digits, the market was calling for either a breakup or some kind of resolution,” said Jack Ablin, who helps manage about $60 billion as chief investment officer of Harris Private Bank in Chicago. “This is going to be the main focus of market activity. It should be good news.”

Stock-index futures also got a boost after Democratic lawmakers pledged to agree on an economic stimulus package by January.

The S&P 500 tumbled 46 percent this year, poised for its biggest annual decline since 1931, after almost $1 trillion of bank losses shrunk the economy and corporate profits fell for five straight quarters. Concern Citigroup may need a government takeover sent bank stocks in the S&P 500 down 24 percent last week, the steepest slide in at least 19 years.

Exxon, Chevron

Exxon declined 73 cents to $75.08 in Germany. Chevron Corp., the second-largest U.S. oil company, lost 1.1 percent to $69.74.

Crude oil for January delivery fell as much 2.3 percent to $48.80 a barrel in New York on speculation further production cuts by the Organization of Petroleum Exporting Countries won’t be enough to prevent a glut in supplies.

Citigroup climbed $1.54 to $5.31 in Germany. The cash injection from the Treasury Department adds to the $25 billion the company received last month under the Troubled Asset Relief Program. In return for the cash and guarantees, the government will get $27 billion of preferred shares paying an 8 percent dividend.

The Treasury, Federal Reserve and Federal Deposit Insurance Corp. said in a joint statement that the move aims to bolster financial-market stability and help restore economic growth.

JPMorgan Chase & Co. added $1.13 to $23.85 in Germany and Bank of America Corp. increased 70 cents to $12.17.

Congress will send President-elect Barack Obama an economic stimulus package the day he takes office Jan. 20, Democratic lawmakers said. Senator Charles Schumer of New York said on ABC’s “This Week” program that the package will be between $500 billion and $700 billion. House Majority Leader Steny Hoyer of Maryland said on “Fox News Sunday” that he believed the Inauguration Day goal would be met. He declined to put a price tag on the bill.

To contact the reporter on this story: Michael Patterson in London at mpatterson10@bloomberg.net.