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Futures Buoyed by M&A; Libya, Japan in Focus

CNBC.com
Monday, 21 Mar 2011 | 9:26 AM ET

U.S. stock index futures gained ahead of the market's opening Monday in the wake of stronger markets overseas, and buoyed in part by AT&T's plan to buy T-Mobile US from Deutsche Telekom to create the largest mobile provider in the United States.

Analysts expect the deal, which is subject to approval by regulators, to be positive for both AT&T and Deutsche Telecom.

AT&T shares rose a little less than 1 percent in pre-opening trading. The German company’s shares rose as much as 14 percent following the news, while shares of Sprint sank. T-Mobile U.S. has not been able to compete with bigger U.S.

Also on the M&A front, Charles Schwab said it will buy OptionsXpress in an all-stock deal for $17.91 a share or about $1 billion.

Citigroup shares gained after the banking giant announced a 1-for-10 reverse stock split, which will reduce Citi's outstanding common shares. The bank also said it will reinstate a quarterly dividend in the second quarter. The dividend will be 1 cent.

Crude oil traded higher Monday morning amid persisting geopolitical concerns.

Military action in Libyastoked fears of an escalating crisis and was likely to offer further support to oil prices Monday, while Japan’s nuclear crisis continued to unnerve investors. Workers had to evacuate the area Monday as

Volatile Global Markets
Continued unrest in the Middle East and Asia are bound to keep the oil and currency markets busy this week, with Marc Chandler, Brown Brothers Harriman and Stephen Schork, The Schork Report.

Japan’s nuclear safety agency said there was no need to widen the evacuation areas around the earthquake-hit reactors, but the World Health Organization said contamination of some foods and water with trace amounts of radioactivity is a more serious problem than originally expected.

The market also may be getting a boost from comments by Warren Buffett, who said the tragedies in Japan have made shares of Japanese companies attractive buying opportunities, according to Simon Denham, CEO of Capital Spreads.

In earnings news, shares of Tiffany gained after the luxury jeweler gave a better-then-expected outlook based on gains of 20 percent in Europe and Asia, not including Japan.

On the economic front, existing home sales are due at 10 a.m. and were expected to fall to a rate of 5.15 million annual units in February from 5.36 million in January, according to economists surveyed by Reuters.

In the currency markets, traders will be seeking signs that central banks may take additional action to weaken the yen following an agreement last week to intervene as the currency soared in the wake of Japan’s disastrous earthquake and resulting nuclear crisis.

European sharesrose in early trading, while Asian stocksclosed higher. The Japanese market was closed for a national holiday.

On Tap Next Week:

MONDAY: Obama in Latin America; Fed Chairman Bernanke, FDIC Chair Bair at commercial bankers conference; existing home sales.
TUESDAY: CTIA Wireless Convention; before-the-bell earnings from Walgreens; after-the-bell earnings from Adobe.
WEDNESDAY: Caterpillar analyst meeting; annual meetings for Disney, HP and Starbucks; mortgage applications, new home sales, oil inventories; before-the-bell earnings from General Mills.
THURSDAY: EU summit; durable goods, jobless claims, natural gas inventories, 10-year TIPS auction, money supply; before-the-bell earnings from Best Buy and ConAgra; after-the-bell earnings from Oracle, Research in Motion.
FRIDAY: USDA food prices outlook; GDP revision, corporate profits, and consumer sentiment.

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