By Daniela Silberstein and Elizabeth Stanton
Jan. 21 (Bloomberg) -- U.S. stock-index futures gained, indicating the Standard & Poor’s 500 Index will rebound from a two-month low, on speculation a bank-rescue plan from President Barack Obama will shore up financial companies.
Citigroup Inc. and Bank of America Corp, the biggest U.S. banks by assets, surged more than 6 percent. International Business Machines Corp. climbed 4.9 percent after its 2009 profit forecast topped analysts’ estimates. McDonald’s Corp. rose after being added to Goldman Sachs Group Inc.’s “conviction buy” list.
“Our guess is by the year-end, that the reflation going on with the monetary policy, the fiscal policy, the decline in the price of oil, all that reflation will overcome the deflationary forces, and we’ll have a somewhat higher market,” Robert Doll, who oversees about $300 billion as chief investment officer for global equities at BlackRock Inc., told Bloomberg Television.
Futures on the S&P 500 expiring in March rose 1.1 percent to 814.6 at 9:14 a.m. in New York. Dow Jones Industrial Average futures added 68 points, or 0.9 percent, to 8,013. Nasdaq-100 Index futures climbed 0.5 percent to 1,148.5.
U.S. stocks sank yesterday, sending the Dow Jones Industrial Average to its worst Inauguration Day decline, as speculation banks must raise more capital pushed financial shares to an almost 14-year low. The S&P 500 is off to its worst start to a year, shattering the biggest rally since World War II as analysts cut earnings estimates by a record 83 percentage points and companies signal worse to come.
Europe’s Dow Jones Stoxx 600 Index dropped 0.5 percent, while the MSCI Asia Pacific Index slid 2 percent.
Bank Rescue
Treasuries fell for a third day as traders added to bets deflation will become less of a concern after Obama called on Americans to rebuild the economy.
Obama meets with his economic advisers today. The new president’s team is pushing to complete a bank-rescue plan that can be twinned with the $825 billion stimulus package being negotiated with Congress to alleviate the deepening financial crisis.
While full details of the rescue haven’t been settled yet, people familiar with the deliberations said the package is likely to include a $50 billion-plus program to stem foreclosures, fresh injections of capital into banks and steps to deal with toxic assets clogging lenders’ balance sheets.
Timothy Geithner, Obama’s nominee for Treasury Secretary, plans to call for “reform” of the government’s main financial- rescue program and quick action to revive the economy, according to remarks prepared for delivery at his confirmation hearing at 10 a.m. in Washington.
Banks Rally
Citigroup, the U.S. bank that received a government-backed capital injection of $20 billion in November, surged 11 percent to $3.10 in trading before the open of exchanges in New York. Bank of America, the biggest U.S. lender by assets, rose 6.7 percent to $5.44. JPMorgan Chase & Co. advanced 4.3 percent to $18.86.
IBM added $4.02 to $86. The biggest computer-services provider posted fourth-quarter profit of $4.43 billion, or $3.28 a share, surpassing analysts’ estimates, as the top provider of computer services coped with a worldwide technology slump by cutting overhead costs and adding products.
McDonalds gained 74 cents to $57.81. The world’s largest restaurant company was upgraded by Goldman Sachs based on its “ability to meet or exceed earnings expectations over the next couple quarters.”
BlackRock Tumbles
BlackRock Inc. slid 5.5 percent to $97.78. The largest publicly traded U.S. asset manager said fourth-quarter earnings fell 84 percent as losses in stock and bond markets cut fees. Excluding some items, profit was 68 cents a share, below the average analyst estimate of 99 cents. Asset values declined by $80.5 billion in the quarter.
Wal-Mart Stores Inc. declined 16 cents to $50.30. The world’s biggest retailer and the fifth-best performing stock in the S&P 500 last year, was cut to “neutral” from “outperform” at Credit Suisse Group AG, which said “waning inflation and slowing square footage growth should pressure sales growth.”
Forest Laboratories Inc. fell 4.2 percent to $24.45. Goldman Sachs downgraded the drugmaker to “sell” from “neutral.”
To contact the reporters on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net. Elizabeth Stanton in New York at estanton@bloomberg.net
Posts
No comments:
Post a Comment