NEW YORK: Wall Street was set for an upbeat start on Monday, with investors enthusiastic that President-elect Obama's plan to launch the largest i
nfrastructure-spending package since the 1950s will help boost the crippled economy.
Obama announced over the weekend plans for the largest U.S. public works spending program since the creation of the interstate highway system a half-century ago. That could bolster the economy by putting thousands of people to work building schools and other construction projects.
Investors also appeared more comfortable that the government is closer to legislation that would dole out billions to America's three biggest automakers within a week. Congress is expected to pass a $15 billion bailout for Ford Motor Co., General Motors Corp., and Chrysler as soon as Tuesday.
Major U.S. stock indexes fell last week after a number of negative reports seemed to indicate the recession is showing no signs of weakening. However, as the week progressed, the market appeared to be taking the bad news in stride — even Friday's Labor Department report that showed the nation lost more than a half a million jobs last month. The report raised hopes that the government would take more steps to stimulate the economy.
Ahead of the opening bell, Dow Jones industrial average futures rose 196, or 2.23 per cent, to 8,808. Standard & Poor's 500 index futures rose 21.20, or 2.43 per cent, to 893.60; and Nasdaq 100 futures added 24.75, or 2.10 per cent, to 1,202.75.
Stocks rallied globally as investors took heart from signs the world's largest economies are redoubling efforts to revive growth. In China, government officials this week are meeting to discuss possible new steps to expand the $586 billion stimulus that is already in place.
Hong Kong's Hang Seng index vaulted 8.7 per cent to its highest close in seven weeks, while Japan's Nikkei 225 average 5.2 per cent. Major European bourses also surged, with Britain's FTSE-100 climbing 5 per cent, Germany's DAX up 6.3 per cent, and France's CAC-40 adding 6.4 per cent.
In other corporate news, Tribune Co. might be heading toward bankruptcy. The owner of the Los Angeles Times and Chicago Tribune, other newspapers and the Chicago Cubs and Wrigley Field, has hired financial advisers ahead of a possible filing for bankruptcy court protection, according to reports on Sunday. The Chicago Tribune reported that its parent hired investment bank Lazard Ltd. and law firm Sidley Austin as it considers its financial options.
Oil prices bounced off four-year lows after OPEC's president suggested the group could surprise investors with a large production cut later this month. Light, sweet crude rose $1.71 to $42.52 a barrel in electronic trading on the New York Mercantile Exchange.
Bond prices fell as stocks futures moved higher, with yields continuing to move above record lows. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 2.78 per cent from 2.70 per cent late Friday. The yield on the three-month T-bill, considered one of the safest investments, was unchanged from late Friday at 0.01 per cent.
The dollar was mixed against other major currencies, while gold prices fell.
