By Corinne Gretler and Inyoung Hwang - Dec 9, 2011 8:35 PM GMT+0700
U.S. stocks futures rose, indicating the Standard & Poor’s 500 Index (SPX) will pare this week’s drop, after European leaders agreed to boost a rescue fund and tighten budget rules to stem the region’s debt crisis.
JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) climbed more than 0.9 percent as financial companies rallied amid optimism on Europe. Caterpillar Inc. (CAT), the world’s largest construction and mining-equipment maker, and Halliburton Co. (HAL) gained at least 0.8 percent as investors bought shares of companies most tied to economic growth. DuPont Co. lost 6 percent as it lowered its forecast for full-year earnings.
Futures on the S&P 500 expiring in March gained 0.5 percent to 1,236.3 at 8:34 a.m. New York time. Dow Jones Industrial Average Index futures added 46 points, or 0.4 percent, to 11,990 today.
The S&P 500 has declined 0.8 percent this week after the gauge slid 2.1 percent yesterday as the European Central Bank damped speculation it would boost purchases of government bonds.
“We’re right on track,” Otto Waser, chief investment officer at Research & Asset Management AG in Zurich, told Bloomberg Television. “We’re 20 percent where we should be towards fiscal union to rescue the euro.”
European leaders meeting in Brussels tightened anti-deficit rules and agreed to boost their crisis-fighting war chest by as much as 200 billion euros ($267 billion) by funneling money to the International Monetary Fund.
‘Fiscal Compact’
In an accord hailed as a “very good outcome” by ECB President Mario Draghi, the leaders outlined a “fiscal compact” to prevent future debt run-ups and accelerated the start of a planned 500 billion-euro rescue fund. In addition, they watered down the demand that investors share the cost of future bailouts.
Leaders aim to set up the permanent rescue fund, known as the European Stability Mechanism, in July 2012, a year ahead of schedule. By March, they will reassess plans to cap the overall lending of the ESM and the temporary fund at 500 billion euros. For the time being, Germany deflected a move to grant the ESM a banking license, which would enable it to multiply its firepower by borrowing from the ECB.
In the U.S., the Thomson Reuters/University of Michigan index of consumer sentiment probably rose to 65.8 in December from 64.1 in November, the highest level since June, according to a Bloomberg survey of 73 economists before the data is released at 9:55 a.m. New York time.
Trade Gap
The trade deficit narrowed in October to the lowest level of the year, reflecting a drop in imports that will help give the U.S. economy a lift. The gap shrank 1.6 percent to $43.5 billion, smaller than projected, from $44.2 billion in September, Commerce Department figures showed. Purchases from overseas fell to the lowest level since April, due almost entirely to a plunge in demand for petroleum.
JPMorgan Chase climbed 0.9 percent to $32.50. Bank of America advanced 1.1 percent to $5.65. Citigroup Inc. (C) increased 2.1 percent to $28.32.
Investors bought shares of cyclical companies, sending Caterpillar up 0.8 percent to $93.70. Halliburton, the Houston- based energy services provider, rose 1.1 percent to $33.51.
Ford Motor Co. (F), the second-largest U.S. automaker, increased 1.9 percent to $10.95. Ford Otomotiv Sanayi AS, its Turkish unit in partnership with Koc Holding AS, said it expects this year’s van and truck production to rise 22 percent in 2010, while predicting sales jumping 17 percent.
DuPont slid 6 percent to $43.72. The most valuable U.S. chemical maker lowered its forecast for 2011 to no more than $3.95 a share from as much as $4.05, missing the average analyst estimate of $4.04. The Wilmington, Delaware-based company cited slower growth in certain segments.
To contact the reporters on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net; Inyoung Hwang in New York at ihwang7@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
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