Updated from 7:12 a.m. EDT
Premarket futures were indicating an exuberant open for U.S. stocks Friday following reports that the government was creating a sweeping fix for the financial crisis. A moratorium on short-selling by the
Securities and Exchange Commission
also contributed to the rosy outlook.
Futures for the
were up 50 points at 1253 and were 44 points above fair value.
futures were up 68 points to 1776 and were 67 points better than fair value.
Financial stocks were set to skyrocket. In premarket trading, names including
were all showing sizable double-digit gains.
During Thursday's volatile session, the major indices swung back and forth before rallying sharply in the afternoon. The
Dow Jones Industrial Average
traded in a 617-point range before gaining 410 points, or 3.9%. The S&P 500 and Nasdaq added 4.3% and 4.8%, respectively.
The late gains came on a
report that the Treasury Department was formulating an entity that would remove bad debt from companies' balance sheets. The plan includes a possible $800 billion fund to buy bad debt from troubled financial firms.
Early Friday, the Treasury said it would offer $50 billion to insure
mutual funds. A number of such funds have lately been under fire thanks to investment in bad debt from bankrupt
and flailing insurer
The SEC, meanwhile,
of 799 financial stocks, effective immediately. The temporary crackdown will remain in place until Oct. 2. The U.K.'s financial regulator also banned short sales of 29 of its publicly traded companies. Short-selling, or making a bet that a given stock's price will fall, has been a source of heated controversy as some have speculated that short-sellers are responsible for the decline of
Elsewhere in the financials space, AIG said
will succeed Robert Willumstad as chairman and CEO. Willumstad was ousted by Treasury Secretary Henry Paulson as part of a government bailout package for AIG.
Stocks were further buoyed by decent earnings statements in the technology sector. After Thursday's session closed,
reported rising fiscal first-quarter profits but offered cautious revenue guidance.
Mobile device maker
posted a wider first-quarter loss but still bested Wall Street's estimates.
Looking at commodities, oil was gaining $1.52 to $99.40 a barrel. Gold was giving back $35.90 to $861.10 an ounce after surging more than $110 in the previous two days.
Longer-dated U.S. Treasury securities were declining in price. The 10-year was down 2 points to yield 3.78%, and the 30-year was off 2-16/32, yielding 4.33%. The dollar was making substantial gains on its major foreign competitors.
Overseas, the FTSE in London was up 8.5%, and the DAX in Frankfurt was gaining 4.9%.
went on a tear. The Nikkei in Japan closed with a gain of 3.8%, and the Hang Seng in Hong Kong jumped 9.6%.