Futures Turn Positive as TARP Banks Go Higher
Futures showed a slightly open for Wall Street on Tuesday, with bank stocks rising as some of the nation's largest institutions poised to repay government bailout money.
Nine banks are set to repay capital they received through the Troubled Asset Relief Program. The companies are expected to give back some $50 billion, about twice what the government expected.
Shares of Goldman Sachs and JPMorgan Chase both gained about 1 percent in premarket trading.
Banks continue to hold large amounts of toxic assets and the stress tests should be repeated if unemployment worsens, a Congressional Oversight Panel report showed.
Also in the banking sector, all ten of the largest U.S. banks under order to raise additional capital have submitted their plans to do so, the Federal Reserve said.
European shares were higher, with energy stocks boosted by buoyant oil prices, but Asian stocks were mixed, with investors worried the recovery rally was overdone.
Market participants are awaiting a $35 billion auction of three-year U.S. Treasury notes later in the day and auctions of 10-year and 30-year U.S. Treasurys later in the week to get a better picture of rate expectations.
In corporate news, tech stocks got a boost from Texas Instruments after the chip maker raised its targets for second-quarter earnings and revenue, signaling improving demand in the chip market. Shares gained 3.8 percent in premarket trading.
Italian automaker Fiat will not walk away from its deal to buy bankrupt Chrysler, a spokesman said after the U.S. Supreme Court delay threw the deal into doubt. The deadline for the deal is June 15.
Late Monday, Citigroup said it expected to begin its much-delayed $58 billion stock swap later this week as part of a plan that could leave the government with a 34 percent stake. Citi shares were up nearly 1 percent premarket.
And a House Financial Services subcommittee holds a hearing on OTC derivatives and swaps.
Treasury Secretary Timothy Geithner testifies before a Senate Appropriations committee on the Treasury's budget request at 10 am New York time.
Elsewhere, steel industry stocks could be under pressure.
Standard & Poor's cut its credit rating on ArcelorMittal, the world's largest steelmaker, and issued a negative outlook. S&P said generally dour prospects for the industry would weigh especially on ArcelorMittal, sending the company's stock down 2 percent premarket. Conversely, shares of US Steel gained 3 percent.
Economic data out of the U.S. includes wholesale trade data for April at 10 am New York time and the NFIB small business survey out at 7:30 am.
Oil prices rose ahead of afternoon inventory data from the America Petroleum Institute as analysts polled by Reuters expect a decline in weekly crude supplies.