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Futures Point to Huge Opening Gains

CNBC.com
Monday, 10 May 2010 | 5:54 AM ET

U.S. stock index futures pointed to a massive rebound on Wall Street after European Union finance ministers agreed to a $1 trillion global emergency rescue package over the weekend.

The Dow Jones Industrial Average was indicated to open nearly 400 points higher, while the braoder S&P index was 50 points above fair value. The respective gains all hovered around 4 percent.

The rise in futures comes in the wake of the biggest weekly drops for the Dow and S&P 500 since March of 2009, and the largest one-week decline for the Nasdaq since November 2008.

Gains were broad-based but financials were poised to lead the pack. The SPDR Financial exchange-traded fund, which closely tracks the S&P 500's financial sector, was up nearly 5 percent in premarket trading.

Commodities also rose sharply on the European developments, with oil gaining about $3 a barrel to cut into last week's big losses. Oil remains about 10 percent below its May high of $87.15.

The price moves were consistent with a big drop in the dollar. The dollar index, which tracks the US greenback against a basket of foreign currencies, fell 1.3 percent.

The US bond market tumbledon the developments in Europe. The benchmark 10-year note lost a full point in price while its yield, which moves inversely to price, rose to 3.55 percent from 3.43 percent late Friday.

European stock indexes shot higher with the FTSE-100, CAC-40 and DAX all up more than 4 percent. The euro also surged to more than $1.30 on the back of the agreement.

Goldman Sachs shares will be watched closely after the Wall Street giant warned that it faces more investigations into its trading practices, particularly regarding Greece. Goldman shares rose 3.4 percent in premarket trading.

There are no U.S. economic reports on Monday and the only event of note is the Bank of England's interest rate decision, scheduled for 7 am New York time. The central bank is expected to keep its benchmark interest rate unchanged at 0.5 percent.

In earnings news, Berkshire Hathaway reported a quarterly profit of $2,272 per class A share during the fourth quarter, well above estimates.

Earnings season is winding down after several busy weeks, but there will be a number of reports ahead of the opening bell, including the latest numbers from Dean Foods, Tyson Foods, Dish Network, NRG Energy, and Watson Pharmaceuticals. Priceline.com is among the companies set to release quarterly earnings after the closing bell.

  Price   Change %Change
DF
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DISH
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NRG
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The Priceline Group
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TSN
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ACT
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Following last week's wild market swings, including that nearly 1,000-point intraday decline for the Dow, NYSE CEO Duncan Neiderauer and Nasdaq OMX CEO Robert Greifeld will meet with the Securities and Exchange Commission Monday morning on ways to prevent such events from occurring in the future. It's scheduled for 10 am.

Also at 10 am, President Obama is expected to nominate Solicitor General Elena Kagan for the U.S. Supreme Court to replace the retiring Justice John Paul Stevens.

In addition, BP is considering new options after a steel containment dome was unsuccessful in containing the massive Gulf oil spill.

  Price   Change %Change
BRK.A
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GS
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SPDR FIN SEL
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The Priceline Group
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ACT
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TSN
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DF
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