Futures Jump After Housing Starts Surprise
Futures rebounded Tuesday after a report showed new home construction unexpectedly jumped in February.
Housing starts shot up 22.2 percentto a seasonally adjusted 583,000 annual rate last month, the first increase in nearly a year, after a sharp drop in January that was revised slightly higher. Applications for building permits, a gauge of future home-building activity, also rose unexpectedly, climbing 3 percent to an annual pace of 547,000.
Meanwhile, producer prices rose 0.1 percent in February, as energy prices moderated. Excluding volatile food and energy components, PPI advanced 0.2 percent.
Alcoa put the most pressure on the market after the Dow component said Monday it was slashing its dividend, issuing $1.1 billion in stock and convertible notes and cutting 2010 spending as it struggles through a decrease in aluminum demand.
The company's shares slumped 12.5 percent in premarket trading.
Financial stocks will continue to be closely watched, following the backlash of AIG's bonus payments to its financial products employees.
Despite all the uproar over the bonus controversy, AIG's beaten-down shares have staged a resurgence this week, gaining 66 percent Monday and picking up another 5.4 percent premarket Tuesday. The move came after AIG said it paid out $173.3 billion of its bailout money to trading partners.
Elsewhere in financials, American Express shares shed 5 percent premarket as the company said credit card delinquencies rose, while Citigroup continued its upward momentum, gaining 4.3 percent premarket as investors showed confidence that the battered bank will survive the credit crisis.
Most major markets in Asia recorded gains for the day, but momentum was lost as European markets opened, with most of those indexes trading in the red in morning trading.
Citigroup and Morgan Stanley are looking at ways to sidestep government bonus caps, according to a report in the Wall Street Journal.
And in the troubled auto sector, tensions are rising between General Motors bondholders and the government, with bondholders reacting to statements that from the head of the auto task force that they are being "difficult."
Housing and inflation will be the big economic numbers before the bell.