Stock Futures Climb on Fed Debt Relief News
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,
(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
(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.
finished mixed following a rate cut from Australia's central bank.
