U.S. stock index futures rose sharply ahead of the open Friday after Libya announced it was ceasing military operations to protect civilians in the wake of United Nation's decision to create a no-fly zone over the country.
Earlier, futures rose in the wake of a decision by the group of seven largest industrialized nations (G7) to intervene in the currency marketto restrain a soaring yen in the wake of last week’s devastating earthquake in Japan.
Libyan Foreign Minister Moussa Koussa said the country was declaring a ceasefireto protect civilians and comply with a UN Resolution reached late Thursday. Muammar Gaddafi had earlier pledged to crush Libyan rebels with “no mercy, no pity.”
Oil prices fell on the news. London Brent crude fell below $114 a barrel, while U.S. light sweet crude also fell.
In the currency markets, the yen weakened just minutes after the announcement on joint intervention was made, but investors were still speculating whether the move will be successful in the long run.
Japanese stocks rose on relief that exports will not be hampered by a strong Japanese currency.
“It’s been a significant development," Daragh Maher, deputy head of global FX strategy at Crédit Agricole Corporate and Investment Bank told CNBC.
“The intervention should delay or slow down that process of repatriation by households,” he said, adding the move was positive in stabilizing the Japanese economy.
Meanwhile a host of companies including Honda , Sony and General Motors were expected to suffer from supply chain disruption as plants remain closed following the disaster last week.
Cisco shares gained after the company said it would pay a cash dividend to shareholders for the first time. The networking giant will pay shareholders 6 cents a share on April 20.
In M&A news, Quest Diagnostics said it will buy rival Celera for about $657 million in cash. Celera is engaged in testing genes.
The Federal Reserve will release results of recent stress tests Friday afternoon. Institutions with strong capital positions will be able to start to pay dividends and initiate stock buybacks. Most U.S. financials rose ahead of the open.
In company news, investors will eye Nike after the athletic-wear maker reported a disappointing profit hit by rising oil and cotton prices. Shares of Nike fell 6 percent in extended trading Thursday.
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