Premarket futures were indicating stocks on Wall Street would continue their rally Tuesday, as the Treasury Department plans to announce an investment of $125 billion in nine large U.S. banks.
Futures for the
S&P 500 were up 13 points to 1030 and were 23 ahead of fair value.
Nasdaq futures were better by 15 points at 1473 and were 34 above fair value.
On Monday, stocks snapped back from their eight-session October losing streak with massive gains. The Dow registered its largest-ever gain in terms of points, rising 936 points, or 11%. The S&P 500 and the Nasdaq each jumped 12%. The large gains came as central banks around the world collaborated on plans to inject capital into the global financial system.
Ahead of the new session,
the Wall Street Journal reported that the Treasury was preparing to dedicate $250 billion of the $700 billion bailout package to buying equity positions in U.S. banks.
The government would buy preferred shares in
Goldman Sachs (GS Quote - Cramer on GS - Stock Picks),
Morgan Stanley (MS Quote - Cramer on MS - Stock Picks),
JPMorgan Chase (JPM Quote - Cramer on JPM - Stock Picks) ,
Bank of America (BAC Quote - Cramer on BAC - Stock Picks),
Merrill Lynch (MER Quote - Cramer on MER - Stock Picks) ,
Citigroup (C Quote - Cramer on C - Stock Picks),
Wells Fargo (WFC Quote - Cramer on WFC - Stock Picks),
Bank of New York Mellon (BK Quote - Cramer on BK - Stock Picks) and
State Street (STT Quote - Cramer on STT - Stock Picks), the
Journal reported.
Goldman Sachs was undertaking some of its own maneuvers, seeking a New York state charter for its new banking subsidiary. Goldman, along with Morgan Stanley, became a bank holding company on Sept. 21. Many major commercial banks apply for charters from federal rather than state regulators.
Elsewhere in the financials, Hank Greenberg, former CEO of
AIG (AIG Quote - Cramer on AIG - Stock Picks), was preparing a proposal to keep the company from being taken over by the government. AIG is rushing to pay back a bridge loan from the government to avoid being seized.
Mike Taylor
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