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Futures Rise on Rare Banking Optimism

CNBC.com
Tuesday, 10 Mar 2009 | 8:03 AM ET

US stock index futures pointed to a higher open for Wall Street after Monday's selloff and with some good news emerging from the banking sector.

Major indexes were indicating gains of more than 1.5 percent at the open.

In banking news, Citigroup was profitable in the first two months of 2009 and is confident about its capital strength, a memo from Chief Executive Vikram Pandit, obtained by Reuters, showed.

The bank underwent tough internal stress tests that proved its strength and Pandit said he was disappointed with Citi's stock price and "broad-based misperceptions about our company and its financial position," according to the memo.

Citi shares gained 19 percent in premarket trading.

Similarly, shares of Bank of America continued their march higher following report that the company would emerge successfully from the credit crisis. BofA shares gained 14.7 percent premarket.

HSBC , whose shares fell to their lowest level since 1995 on Monday but enjoyed a bounce by 14 percent premarket Tuesday, said further price volatility was likely on Wednesday as investors position themselves ahead of the bank's $17.7 billion rights issue.

But hopes for a world coordinated effort to fight what is likely to become the longest post-war recession were dashed as the European Union snubbed a US call for Europe to boost spending.

Also in the financial space, shares of Capital One Financial continued their rise, surging nearly 10 percent a day after the credit card company announced it was cutting its dividend 87 percent.

Shares also rose for CNBC.com-parent General Electric , gaining more than 4 percent premarket a day after the conglomerate said it was selling $8 billion in debt.

Outside of banking, shares of Rohm & Haas gained 4.6 percent after the deal was finalized for its acquisition by Dow Chemical. The deal is expected to close by April 1 under terms similar to the $78 a share price agreed to in July. Dow Chemical shares slumped 8.7 percent.

Caterpillar also was trading higher, gaining 6.6 percent as underperforming machinery companies look to change their fortunes.

Asian stocks were mainly higher, except for the Nikkei which closed slightly lower, while in Europe all the major indexes were in the green in morning trading after the Citigroup news.

Markets will be watching for a speech by Federal Reserve chairman Ben Bernanke, at 8:30 am New York time and wholesale inventories data is due out shortly after the market opens, at 10:00 am.

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BAC
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C
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CAT
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COF
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DOW
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GE
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HSBA
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NDAQ
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