Stock Futures Point to Rebound
NEW YORK ( TheStreet) -- Stock futures were pointing to a financials-supported rebound Friday, after the previous session's deep selloff, as investors shrugged off Moody's downgrade of the major banks.
Futures for the
Dow Jones Industrial Average were gaining 44 points, or 45.4 points above fair value, at 12,546. Futures for the
S&P 500 were rising by 5 points, or 4.1 points above fair value, at 1323, and futures for the
Nasdaq 100 were ahead by 5.5 points, or 6.1 points above fair value, at 2557.
Stocks suffered their worst single-day drop in three weeks Thursday as investors were spooked by a gloomy batch of global economic data, a bearish trading call by Goldman Sachs and disappointment with the outcome of the Federal Reserve's latest policy meeting.
On Thursday evening, Moody's downgraded fifteen of the biggest global banks, but they followed with a rally.Citigroup (C), Bank of America (BAC) and Morgan Stanley (MS) were among the banks who saw their credit ratings slashed as expected, and they were rising by a respective 1.1%, 1.5% and 2.6% in premarket trading Friday. The Hong Kong Hang Seng index closed lower by 1.4% and the Nikkei in Japan closed down 0.29%. The FTSE in London was slipping by 0.75% and the DAX in Germany was declining by 0.53% as business confidence in the biggest eurozone economy fell to its lowest point in more than two years. European leaders are meeting in Rome Friday to discuss a unanimous plan on bringing relief to the eurozone debt crisis. One area of contention going into the meetings is the proposal to tax financial transactions and to have banks foot the bill for their own bailouts. In Spain, independent audits indicate that the country's banks will, under duress, require up to €62 billion in financial support, below the earlier foreseen €100 billion in eurozone bailouts. Friday's U.S. economic calendar is empty. August crude oil futures were edging up 53 cents to $78.73 a barrel. August gold futures were rising $4.70 to $1,570.20 an ounce. The benchmark 10-year Treasury was lower by 1/32, raising the yield to 1.622%, while the dollar was flat, according to the dollar index. In corporate news, shares of Darden Restaurants (DRI) fell in pre-market action after the Orlando-based company posted in-line earnings for its fiscal fourth quarter but came in slightly short on the top line. Arch Coal (ACI) said after Thursday's closing bell that it's laying off 750 employees, or roughly 10% of its workforce. The company said it plans to "idle several operations and to reduce production at other mining complexes in Appalachia due to the unprecedented downturn in demand for coal-based electricity. " Medtronic (MDT) said its board has approved a 7.2% increase in its regular quarterly cash dividend to 26 cents a share. The medical device company said the dividend is payable on July 27 to shareholders of record on July 6. Monster Beverage (MNST - Get Report) is being added to the S&P 500, replacing Sara Lee (SLE). Standard & Poor's expects the change to take place after the closing bell on June 28. The change was prompted by Sara Lee's decision to spin off its international coffee & tea business to shareholders. Ryder Systems (R - Get Report) lowered its fiscal second-quarter outlook, citing weakness in its fleet management solutions business. The company now sees comparable earnings of 90 to 95 cents a share for the three months ended in June, down from a previous expectation for a profit of $1.07 to $1.12 a share.
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