Stock Futures Rise as Summers Bows Out
NEW YORK ( TheStreet) -- U.S. stock futures were pointing to a higher open on Wall Street Monday as global markets strengthened on the decision by Larry Summers, a former U.S. Treasury Secretary and economic adviser to President Obama, to withdraw as a candidate to succeed Ben Bernanke as the next Federal Reserve chairman. Summers' move appears to leave Fed Vice Chair Janet Yellen as the frontrunner for the position and fuels hopes for a protracted Fed stimulus program.
"As Yellen is perceived to be the most dovish candidate, we would expect the news to be positive for both bonds and equities on Monday morning," Paul Ashworth, chief U.S. economist at Capital Economics in Toronto, commented in a note.
Deals developments were also boosting market sentiment.
Futures for the S&P 500 were rising 16.75 points, or 18.56 points above fair value, to 1,698.75 while futures for the Dow Jones Industrial Average were gaining 154 points, or 179.94 points above fair value, to 15,465. Futures for the Nasdaq were adding 26.50 points, or 28.48 points above fair value, to 3,198.In company news, Packaging Corp. of America (PKG) was jumping more than 11.5% to $61 after the company announced that it will buy Boise (BZ)for $12.55 a share in cash or $1.995 billion in aggregate. Boise was soaring more than 27% to $12.69. Chrysler is planning to file documents for its initial public offering this week after majority owner Fiat and the health care trust that owns the rest of the automaker failed to agree a market price in a long-running dispute, The Financial Times reported. Sohu.com (SOHU) was tacking on more than 6.5% to $69.07 after Tencent announced that is taking a 36.5% stake in Sohu's Sogou search engine. Boeing (BA) was gaining 1.77% to $113.30. Top decision makers in South Korea's 8.3 trillion won ($7.64 billion) fighter jet tender have briefed the president on the outcome of an assessment process and told her that Boeing's F-15 Silent Eagle was the sole eligible bid, a source with knowledge of the process told Reuters. In other Boeing developments, the Dreamliner 787-9's maiden flight is expected to take place this week. A number of U.S. economic releases were scheduled for Monday. The New York Federal Reserve's Empire State manufacturing index showed a smaller-than-expected increase to 6.29 for September from 8.24 in August; an increase to 9.2 was expected, according to a Thomson Reuters poll of economists. It was the lowest level since May but remained in expansionary territory for the fourth consecutive month. At 9:15 a.m., the Federal Reserve is forecast to report that industrial production rose 0.4% in August after being flat in July. The report is expected to say also that capacity utilization rose to 77.8% from 77.6%. Obama plans to deliver a speech at 11:40 a.m. in the White House's Rose Garden to mark the fifth anniversary of the collapse of Lehman Brothers. The DAX in Germany was climbing by 1.08% and the FTSE 100 was advancing by 0.69%. The Hong Kong Hang Seng closed ahead by 1.47%. Japanese equity markets were closed for a public holiday. The benchmark 10-year Treasury was surging by 22/32, diluting the yield to 2.805%. The dollar was falling 0.38% to $81.15 according to the U.S. dollar index. October crude oil futures were falling by $1.42 to $106.79 a barrel while December gold futures were gaining $7.20 to $1,315.80 an ounce. Follow @atwtse -- Written by Andrea Tse in New York >To contact the writer of this article, click here: Andrea Tse.>
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