RTRS: US STOCKS-Futures rise on Citi rescue; eyes on Obama
* U.S. government sets rescue of Citigroup; stock jumps
* Obama to unveil his economic leadership team
* Financial shares poised to lead market's advance
* For up-to-the-minute market news, please click on STXNEWS/US
By Ellis Mnyandu
NEW YORK, Nov 24 (Reuters) - U.S. stock index futures rose on Monday after the U.S. government agreed to pump $20 billion of new capital into Citigroup (C.N: Quote, Profile, Research, Stock Buzz), averting a bank collapse that could have crippled the world's financial system.
Shares of Citigroup jumped more than 30 percent to $5.07 before the bell as investors welcomed the rescue of the No. 2 U.S. bank, whose shares last week plunged to their lowest levels in about 15 years amid a crisis of confidence.
The reassuring news on Citigroup, along with momentum sparked by Friday's news that President-elect Barack Obama would appoint current New York Federal Reserve Bank President Timothy Geithner as U.S. Treasury Secretary, underpinned positive sentiment.
The market is also anticipating details on Obama's plan for a two-year economic stimulus package involving the creation of 2.5 million jobs over two years.
"There's good momentum coming our way. A lot of the things we were concerned about needed answers," said Arthur Hogan, market analyst at Jefferies & Co in Boston.
"One of the things we needed an answer to was who was going to be the Treasury Secretary, and we got that on Friday. Another thing we needed an answer to was what we were going to do with Citigroup, and we got the answer to that last night."
S&P 500 futures SPc1 rose 22.30 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures DJc1 jumped 146 points, and Nasdaq 100 NDc1 futures climbed 17 points.
Geithner, 47, will lead the Unites States' $700 billion bailout plan for the financial industry. In a bid to bring calm to the market, Obama is due to announce his economic leadership team at 12 noon (1700 GMT) on Monday.
But even with the positive momentum, there was likely to still be caution as the market tries to recover from 11-year lows and concern remains about the fate of the U.S. auto companies, including General Motors (GM.N: Quote, Profile, Research, Stock Buzz) , which are seeking billions in government financial aid.
Citigroup's rescue marks the latest government effort to contain a widening financial meltdown that has caused the disappearance or bankruptcies of companies including Bear Stearns Cos, Lehman Brothers Holdings Inc (LEHMQ.PK: Quote, Profile, Research, Stock Buzz) and Washington Mutual Inc (WAMUQ.PK: Quote, Profile, Research, Stock Buzz).
In addition to the new capital, Washington effectively guaranteed most of Citi's $306 billion losses on high-risk assets.
U.S. stocks stormed higher in a late rally on Friday to cap another volatile week as investors welcomed reports that Obama had chosen Geithner as his point person to combat the U.S. economic crisis. (Editing by Kenneth Barry)
