RTRS: U.S. stock futures signal rally on debt plan hopes
U.S. stock index futures signalled a rally on Wall Street on Monday, as investor focus stayed squarely on a Washington plan to help financial institutions get rid of troubled assets.
At 0935 GMT, futures for the S&P 500 SPc1 were up 2.6 percent, Dow Jones DJc1 futures were up 2.8 percent and Nasdaq 100 NDc1 futures were up 2.6 percent.
News of the plan, which seeks to woo private investors with public funding, lifted stock markets in Asia and Europe and boosted shares of U.S. banks traded in Frankfurt, with Citigroup (C.N) (TRV.F) up 26 percent and Bank of America (BAC.N) (BAC.F) up 17 percent. [nLN237029]
An Obama administration official said that initially, the Treasury will tip in $75 billion to $100 billion to launch the scheme, taking the money from the $700 billion financial rescue fund approved in October. [ID:nSP429491]
The government money would be put alongside private capital and then leveraged up to $500 billion, or possibly double that amount, with the help of the Federal Deposit Insurance Corp, a U.S. bank regulator, and the Federal Reserve.
U.S. Treasury Secretary Timothy Geithner is due to give details on the plan at 1245 GMT.
"It's the return of the 'bad bank' concept, stripping banks of their toxic assets without nationalising them. This will spur gains in banking stocks," Francois Chevallier, strategist at VP Finance, in Paris.
European shares gained ground in early trade on Monday, with the pan-European FTSEurofirst 300 .FTEU3 index of top shares up 1.4 percent, led by sharp gains in the banking sector, with Barclays (BARC.L), Deutsche Bank (DBKGn.DE) and UBS (UBSN.VX) up 4.2-9.1 percent.
Japan's Nikkei jumped 3.4 percent to post its highest close in seven weeks, with banks including MUFG (8306.T) rising on optimism about the U.S. plan.
One of the world's largest asset managers, BlackRock (BLK.N), expressed interest in taking part in the scheme as manager of one of the public-private funds due to be created under the plan.
The dollar continued to fall as risk appetite improved on news of the U.S. plan.
On the mergers and acquisitions front, energy shares will be in the spotlight after Suncor Energy Inc (SU.TO), Canada' No.2 oil company, agreed to buy rival Petro-Canada (PCA.TO) for about C$18.43 billion ($14.86 billion) to expand its oil sand reserves and create the country's biggest energy group.
On the macro front, investors will keep an eye on data on monthly existing home sales-units, due at 1400 GMT, seeking clues on the health of the stricken housing sector.
