Futures Jump on Obama Tax Cut Deal
NEW YORK (
) -- Stock futures pointed to a robust open Tuesday as President Obama reached an agreement with congressional Republicans to extend the Bush-era tax cuts for two years and extend jobless benefits for the unemployed.
Futures for the
Dow Jones Industrial Average
were up by 82 points, or 83 points above fair value, at 11,435. Futures for the
S&P 500
were 12 points higher, or nearly 11 points above fair value, at 1234, and
Nasdaq
futures were ahead by 24 points, or 25 points above fair value.
Stocks ended on either side of the flat line Monday as the market weighed continued uncertainty surrounding the eurozone and
Federal Reserve
Chairman Ben Bernanke's acknowledgment that additional bond purchases by the central bank could be necessary.
President Obama agreed to extend tax cuts enacted by the Bush administration for all income levels for two years. Critics said repealing the tax cuts could weaken the economy by hurting consumer spending. The deal reduces worker payroll taxes for one year and extends credits for small businesses in addition to extending unemployment benefits.
The move increased the market's appetite for risk as commodity prices surged and the benchmark 10-year Treasury note weakened 27/32, lifting the yield to 3.028%.
In commodity markets, the January crude oil contract was up by $1.19 to trade at $90.57 a barrel. A day after gold settled at a record $1,415.30 an ounce, the most actively traded February gold contract was up by $13.80 to $1,429.90 an ounce.
.
Shares of
Nicor
(GAS)
were up 5.9% to $49.50 ahead of Tuesday's opening bell on news that it will be acquired by
AGL Resources
( AGL) in a cash and stock deal with an enterprise value of $3.1 billion.
3M's
(MMM) - Get Report
stock was up by 0.4% to $87.25 in early trading as the company said it expects to earn between $6.17 and $6.37 a share, excluding pension expenses, in 2011. That compares with Wall Street estimates for a 2011 profit of $6.20 a share.
On Tuesday, the
euro rose against the dollar to $1.3366 from $1.3314 as eurozone ministers said the bailout fund is large enough. The dollar traded lower against a basket of currencies, with the dollar index down by 0.5%.
The FTSE in London was up by 1.3% and the DAX in Frankfurt was ahead by 1.1%. Hong Kong's Hang Seng added 0.8% while Japan's Nikkei dropped 0.3%.
At 3 p.m. EST, economists expect the Federal Reserve to report a $2.3 billion decline in consumer credit in October, according to Briefing.com. That compares with an increase of $2.1 billion in September.
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At 4:30 p.m., the American Petroleum Institute issues its weekly read on crude oil inventories. Analysts polled by Platts are anticipating a drawdown of 1 million barrels to crude supplies in the week ended Dec. 3.
--Written by Melinda Peer in New York
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