Premarket futures were hinting at a higher open for stocks in New York Thursday, following a report that the Treasury Department may take equity positions in U.S. banks. An encouraging earnings report from tech bellwether IBM (IBM Quote - Cramer on IBM - Stock Picks) also was bolstering sentiment.
Futures for the
S&P 500 were up 23 points at 1004 and were 14 points ahead of fair value.
Nasdaq futures were better by 40 points at 1360 and were 19 points above fair value.
Stocks on Wednesday traded chaotically before closing with losses after the
Federal Reserve and central banks from other countries issued a coordinated cut in interest rates to alleviate the credit crunch.
Ahead of the new day's trading,
The New York Times reported that the Treasury may take ownership positions in U.S. banks to improve confidence in the financial system. The U.K. has pursued a similar plan by taking partial national ownership in
Royal Bank of Scotland (RBS Quote - Cramer on RBS - Stock Picks) and
Barclays (BCS Quote - Cramer on BCS - Stock Picks).
Following its announcement earlier this week that it would set up a facility to buy commercial paper from U.S. businesses, the Fed said it would enlist
Pimco, a unit of
Allianz (AZ Quote - Cramer on AZ - Stock Picks), to help it manage the large amount of debt it intends to buy.
Separately, the Fed said it would grant insurance company
AIG (AIG Quote - Cramer on AIG - Stock Picks) up to $37.8 billion in exchange for fixed-income securities. The cash infusion comes on top of the $85 billion already lent out in September to keep the company from going bankrupt.
Among other insurers,
MetLife (MET Quote - Cramer on MET - Stock Picks) has recently discussed a potential merger with
Hartford Financial (HIG Quote - Cramer on HIG - Stock Picks), according to a report in
The Wall Street Journal. The report said the discussions didn't lead to a deal, but that they indicate the strain the credit crunch has exacted from insurance firms.
Mike Taylor
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