MR: UPDATE: U.S. stocks: Futures higher as oil prices rebound
By Barbara Kollmeyer, MarketWatch
Deal news drives PetSmart shares up
MADRID (MarketWatch) -- U.S. stock futures pointed to a stronger open for Wall Street on Monday, as oil prices rose and as strategists said last week's big move south for stocks was perhaps overdone.
Futures for the Dow Jones Industrial Average (DJH5) jumped 108 points, or 0.7%, to 17,299, while those for the S&P 500 (SPH5) rose 14.10 points, or 0.7%, to 2,004.50. Futures for the Nasdaq-100 index (NDH5) surged 33.75 points, or 0.8%, to 4,220.50.
The collapse in oil prices has been scaring investors out of equities. By Friday's close, the Dow industrials (DJI) recorded its worst week of 2014 and its biggest weekly percentage fall since Nov. 2011 -- a drop of 3.78%. The S&P 500 index (SPX) logged its biggest weekly loss since May 2012 -- a slide of 3.5%
But given that U.S. growth figures aren't dour, and if you believe that lower oil prices will stimulate growth, stocks should not be at these levels, some strategists say. "I'd very much hurry back into equities if I had been one of those selling off last week," said Copenhagen-based Henrik Drusebjerg, chief strategist at Carnegie Investment Bank.
Oil prices got a break on Monday, helped in part by news of the closure of two Libyan oil terminals. Prices rose, though remained choppy: January U.S. crude oil (CLH5) gained 33 cents to $58.14 a barrel, while January Brent crude was up 86 cents, or 1.4%, to $62.71 a barrel.
That rebound came even after the energy minister of the United Arab Emirates, Suhail Al-Mazrouei, told Bloomberg on Sunday that the cartel would accept a price slump right down to $40 per barrel and would only consider convening an extraordinary meeting in three months' time.
"One could almost believe that OPEC wants to see how far it can push the current situation," commented Commerzbank analysts in a note.
Need to Know: The must-avoids in this oil collapse and a stark reminder from Down Under
Data and a big week for the Fed: Plenty of data is on tap for this week, though the big event will be the Federal Open Market Committee meeting and news conference with Fed Chairwoman Janet Yellen on Wednesday. Investors will be looking to see whether the Fed retains its "considerable time" policy-statement pledge. Read: Low-rate pledge may stay in Fed statement
On Monday, the Empire state index for December will be released at 8:30 a.m. Eastern Time, then industrial production data for November will hit at 9:15 a.m. Eastern. The National Association of Home Builders index for December is due at 10 a.m. Eastern.
Deal news for Monday: PetSmart Inc. (PETM) was up around 4% in thin premarket trade after news that it has been acquired by a group of investors led by BC Partners. They will pay $83 a share for the pet-supplies retailer in a $8.2 billion deal, the biggest private-equity deal so far this year.
Berkshire Hathaway (BRK/A) (BRKA) said Friday that it's acquiring Charter Brokerage for undisclosed terms.
Shares of Canadian-based Talisman Energy Inc.(TLM) rose 4% in early premarket trade. The FT said on Friday that Spanish-based Repsol SA is in talks to buy the company, in the first big deal since crude prices started falling last June.
VeriFone Systems Inc.(PAY) and Honeywell International Inc. (HON) are due to report results on Monday.
Overseas markets:European stocks moved higher as energy stocks gained. The Nikkei 225 index fell to a four-week low in Japan on a mostly down day in Asia, after the quarterly tankan survey showed caution on the side of Japan's manufacturers. Prime Minister Shinzo Abe's ruling coalition won a majority in the parliamentary elections on Sunday.
Gold prices(GCG5) fell as stock futures rose, while the dollar (USDJPY) traded choppy against the yen.
