Stock Futures Rise on Greek Austerity Vote
NEW YORK (TheStreet) -- U.S. stock futures advanced Monday after Greek lawmakers passed a package of austerity measures to satisfy the terms for a bailout from the country's international creditors.
Futures for the Dow Jones Industrial Average were up 83 points, or 89 points above fair value, at 12,850. Futures for the S&P 500 were up 9.3 points, or 10.4 points above fair value, at 1350. Futures for the Nasdaq were up 16.7 points, or 20.4 points above fair value, at 2565.
The market welcome Greece's drastic plans to cut spending and wages, even as economists said that these same measures may be detrimental to the country's long-term growth. Riots spread across Athens overnight, with thousands of people protesting the latest round of stringent demands from Greece's creditors.
While several of the country's leaders have defected in recent days, roughly two-thirds of the Greek parliament voted to pass the new austerity measures. The agreement also outlines a bond-swap plan between the government and private lenders that will reduce the country's debt by €100 billion.The austerity legislation should now clear the way for eurozone finance ministers to give Greece its second bailout of at least €130 billion, or $171.5 billion. Officials are expected to meet in Brussels on Wednesday to determine whether Greece will get its next round of bailout aid. Borrowing costs fell at an Italian debt auction Monday, suggesting that investors' faith in the country to repay its debts had increased. The country was able to sell more than €12 billion of bills at rates lower than those in the previous sales. Germany's DAX was up 0.78% while London's FTSE was up 0.99%. Japan's Nikkei Average settled up 0.58% and Hong Kong's Hang Seng was up 0.5%. Despite apparent exuberance in the market, investors are wary of an imminent pullback. "Not everyone can enjoy a meal without putting the fork down every now and again. And the same goes for equity price advances," writes Sam Stovall, chief equity strategist with S&P Capital IQ. Stovall's team recently downgraded information technology, one of the "higher-flying" sectors. "We believe it is more susceptible than most to a sharp, short-term decline in price. However, that doesn't mean our year-end target of 1400 for the S&P 500 is in jeopardy," he adds. Last week, U.S. stocks saw the worst slide yet in 2012. The Dow slipped 61 points as investors feared that Greece was headed for a default and as technical analysis suggested that a market top had arrived.
2012 Stock Predictions and Outlook
|Your one-stop shop for 2012 stock recommendations and market predictions.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV