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Futures Pare Gains After Greece Passes Vote

CNBC.com
Wednesday, 29 Jun 2011 | 9:09 AM ET

Futures pulled back from their earlier highs Wednesday after the Greek parliament passed the austerity package that will pull the country from the brink of default.

Greek Prime Minister George Papandreou won a parliamentary majority in favor of a five-year austerity plan on Wednesday, clearing a major hurdle in Greece's bid to win access to international funding to avoid default.

Papandreou's Socialist government surpassed the 151 votes it required in the 300-seat chamber to secure the passage of the framework law. It must now win approval on Thursday for legislation detailing specific implementation measures for the 28 billion austerity package.

Anticipation of parliament's approval has sparked a two-session rally, helping to erase losses partly brought on by the crisis. But gains have come on light volume, suggesting that caution remained and further upside could be limited.

Bank of America jumped after the bank reached a final settlement in which it will pay $8.5 billion in cash to a group of private trusts who say the bank violated its obligations regarding mortgages issued from Countrywide Financial.

BJ's Wholesale climbed after the retailer agreed to be acquired by private equity firm Leonard Green & Partnersand funds advised by CVC Capital Partners in a deal that values the company at about $2.8 billion.

On the earnings front, KB Home dropped after the homebuilder reported a bigger-than-expected quarterly loss.

Family Dollar Stores slipped after the retailer posted a lower-than-expected profit.

General Mills also declined after the food manufacturer forecast weaker earnings ahead amid higher costs for ingredients and fuel.

Meanwhile, Monsanto gained after the agribusiness company said its net income skyrocketed nearly 80 percent, thanks to robust sales in its core seeds and genetic traits business.

In economic news, weekly mortgage applications slipped last weekamid weakening demand, even as mortgage rates dropped, according to the Mortgage Bankers Association.

Debt worries reverberate in the U.S. as residents in Pennsylvania gathered in a public hall insisting that the city have the option of bankruptcy saying that private bond holders should take risks.

California lawmakers approved the state's budget, which closes a shortfall of nearly $10 billion by more cuts in spending on state universities and welfare.

And the talks to raise the U.S. debt ceiling have reached a critical moment, with President Barack Obama leading negotiations with Republican lawmakers.

In Europe, markets were higher in morning trading while Asian stocks closed higher on optimism about Greece.

On Tap This Week:

WEDNESDAY: Pending home sales index, oil inventories, 7-yr note auction, farm prices, Dell analyst meeting, Fed meeting on card fees
THURSDAY: Weekly jobless claims, Fed's Bullard speaks, Chicago PMI, End of QE2, Marathon Oil split takes place
FRIDAY: Consumer sentiment, ISM mfg index, construction spending, Biden's deadline for deficit plan, HP launches TouchPad, auto sales

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