Futures Rise After Sharp Selloff
US stocks headed for a positive open Tuesday, following the worst start to the month of March on record for the market.
Futures indicated a relief rally off the drop that sent the Dow to a sub-7,000 close for the first time in 12 years.
Shares of JPMorgan Chase gained more than 2 percent in premarket trading following a report that the company made $5 billion last year by trading over-the-counter fixed-income derivatives.
Traders were stepping back in to buy beaten-down shares of some of the big banks.
Citigroup , whose shares are heading into penny range after the government sharply increased its stake in the banking titan, were showing a 10 percent gain premarket, while Bankof America gained 4.7 percent.
Oil prices also staged a rebound after a sharp drop Monday. US light, sweet crude gained nearly a dollar and was closing in on $41 a barrel. The move spilled into stocks, with Chevron up 1.3 percent premarket.
News of AIG’s bailout continued to divide opinion, with many market watchers conceding the insurance giant was too big to fail. But legendary investor Jim Rogers told CNBC it, together with other sick financial institutions, should be allowed to go bankrupt as it risks ruining the entire US economy.
Bank of AmericaCEO Ken Lewis expressed regret over his request for $20 billion of government aid, to the FT newspaper. He said asking for such a large sum to help absorb Merrill Lynch’s losses was a "tactical mistake."
Meanwhile, the head of the Federal Deposit Insurance Corp Chairman Sheila Bair played down fears of prolonged bank nationalizations; by saying the government was unlikely to operate any large financial institutions for a long period.
Investors kept a weather eye on the banking sector in Europe as shares of HSBCtook another hammering after launching its deeply discounted rights issue Monday.
Both Federal Reserve Chairman Ben Bernanke and Treasury Secretary Tim Geithner were due to speak later in the session, which could give investors direction on future policy. Bernanke is speaking at 10 am New York time and Geithner at 12:30 pm.
Atlanta Fed President Dennis Lockhart is also due to speak on the current economic climate at 8 am in Tampa, Florida.
On the economic front, pending home sales for January are to be released at 10 am.
There were numerous corporate earnings due before the bell, including AutoZone, Delta Petroleum and Trina Solar .