RTRS: US STOCKS-Higher open set for Wall St on insurers, hombuilders
U.S. stock index futures pointed to a higher open on Wednesday after news of government aid for life insurers and a merger among homebuilders spurred optimism and offset a quarterly loss from Alcoa (AA.N).
Insurers surged in premarket trade on news the U.S Treasury Department plans to extend the Trouble Asset Relief Program to certain life insurers, the Wall Street Journal reported, citing people familiar with the matter. [ID:nN07494064]
Shares of Hartford Financial (HIG.N) and Lincoln National (LNC.N) rose more than 23 percent.
Helping to further offset earnings news, Pulte Homes (PHM.N) said it would buy Texas-based builder Centex (CTX.N) for $1.3 billion in stock against the backdrop of a troubled industry.[ID:nN08365670]
"It is a positive that especially in a struggling industry like housing, prices have fallen to level where they see value," said Marc Pado, U.S. market strategist, Cantor Fitzgerald & Co. in San Francisco.
"Its good for the market and is something we expect to see across the board in many industries."
S&P 500 futures SPc1 rose 3.30 points and were below 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 rose 17 points, and Nasdaq 100 NDc1 futures rose 11.25 points.
Alcoa kicked off earnings season with a first-quarter net loss that was worse than Wall Street estimated as metal prices and the auto industry slumped. For more, see [ID:nN07485652] Shares edged higher to $8.01 in premarket trade after initially falling 3.7 percent.
Shares of Centex jumped more than 30 percent to $10 while Pulte shed 3 percent to $10.45.
Still, weak earnings announcements from around the globe continued as Intel (INTC.O), the world's largest chipmaker, is unsure of when demand for semiconductors will revive, said Chairman Craig Barrett.
