Banks Boost Wall Street

By Stephen Bernard

NEW YORK -- A relieved Wall Street headed for a sharply higher open Friday after Citigroup (C) and Bank of America (BAC) took significant steps to bolster their balance sheets.

The market also awaited economic reports due later in the morning.

Investors shook off the big banking companies' multibillion dollar fourth-quarter losses.

Citigroup, among the hardest hit by the ongoing credit and mortgage market turmoil, said it will split its operations in two, separating its traditional banking business from the company's riskier assets. The move by Citi follows a deal earlier in the week to sell a majority stake in its brokerage business to Morgan Stanley (MS) as it looks to streamline operations and shed assets.

Investors seemed to be more focused on the steps Citi is trying to take to right itself and not the announcement of its fourth-quarter results. Citi said it lost $8.29 billion, or $1.72 a share, in the fourth quarter.

Bank of America also reported a fourth-quarter loss. The nation's largest bank lost $2.39 billion, or 48 cents a share.

Bank of America's report came hours after it reached a deal to receive an additional $20 billion in support from the government. The bank also will receive guarantees to cover up to $118 billion in losses on loans and securities backed by residential and commercial real estate. The deal is similar to one Citigroup reached with the government last fall.

Dow Jones Industrial Average futures rose 129 points, or 1.58%, to 8,291. S&P 500 index futures jumped 13.50 points, or 1.62%, to 852.90, while Nasdaq 100 index futures gained 18.50 points, or 1.57%, to 1,195.75.