Stock Futures Climb on Fed Debt Relief News

Premarket futures in the U.S. point upward Tuesday following news the central bank will buy short-term debt from nonfinancial companies.
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Updated from 7:00 a.m. EDT

Premarket futures were suggesting U.S. stocks would rebound from Monday's pummeling, after the

Federal Reserve

said it would buy short-term debt from U.S. companies to provide relief from the credit crisis.

The Fed announced creation of a new lending facility to buy short-term commercial paper from businesses. The Fed said it expects the new lending program to remove the stoppage in the credit markets.

Futures for the

S&P 500

were up 8.9 points at 1062 and were 1.5 points above fair value.

Nasdaq

futures were up 21 points at 1427 and were 5.7 points ahead of fair value.

On Monday, the major indices sold off frantically only to recover from much of their losses as the credit crisis manifested itself outside the U.S. The

Dow Jones Industrial Average

, down as much as 800 points during the session, ended with a loss of 369 points, or 3.6%. Nasdaq and the S&P 500 finished down 3.9% and 4.3%, respectively.

After Monday's close,

Bank of America

(BAC) - Get Report

announced it would cut its dividend and raise $10 billion in fresh capital as it reported quarterly earnings ahead of schedule.

Meanwhile,

Citigroup

(C) - Get Report

and

Wells Fargo

(WFC) - Get Report

agreed to take a two-day breather from their legal fight over who would get to acquire

Wachovia

(WB) - Get Report

.

In the technology sector,

chipmaker Advanced Micro Devices

(AMD) - Get Report

announced a plan to spin off its manufacturing operations.

Automaker

Adam Opel

, a segment of

General Motors

(GM) - Get Report

, said it would cease production at its Eisenach, Germany plant, according to the

AP

.

As for economic data, traders will get a look at minutes from the Federal Open Market Committee's Sept. 16 meeting, when the central bank elected to leave its key interest rate unchanged at 2%. Later in the afternoon, the Fed's look at U.S. consumer credit is due for release.

In commodities, crude oil was gaining $3.03 to $90.84 a barrel. Gold was gaining $20 to $886.20 an ounce.

Longer-dated U.S. Treasury securities were declining in price. The 10-year was down 8/32 to yield 3.48%, and the 30-year was down 18/32 to yield 4%.

Abroad, markets were mixed. The FTSE in London was trading higher, while the Dax in Frankfurt was logging losses.

Asian exchanges

finished mixed following a rate cut from Australia's central bank.