MW: U.S. stocks: Futures higher as Draghi lifts Europe
By Barbara Kollmeyer
MADRID (MarketWatch) — U.S. stock futures moved higher early Monday, inspired by merger news and gains from European markets, which rose on hints of more stimulus from European Central Bank President Mario Draghi.
New-home sales data is among indicators to watch, while shares of Burger King Worldwide Inc. and InterMune Inc. could gain on deal news.
Futures for the Dow Jones Industrial Average DJU4, +0.28% rose 50 points, or 0.3%, to 17,043, while those for the S&P 500 index SPU4, +0.32% gained 6.2 points, or 0.3%, to 1,994. Futures for the Nasdaq-100 index NDU4, +0.45% added 15.5 points, or 0.4%, to 4,070.50.
Stocks closed lower on Friday, with both the S&P 500 SPX, -0.20% and Dow industrials DJIA, -0.22% snapping four-day winning streaks. For the week, both the Nasdaq Composite COMP, +0.14% and the S&P 500 rose 1.7%, while the Dow industrials rose 2%.
The Chicago Fed national activity index for July will be released at 8:30 a.m. Eastern, while new home sales for July are due at 10 a.m. Eastern. Also read Economic Preview: Double-sided U.S. economy
Draghi ‘whatever it takes’ part 2: Inspiration for Monday’s gains came from stronger European markets, with the Stoxx Europe 600 index SXXP, +0.68% up 0.6%. Dovish comments Friday evening from Draghi increased speculation that another easing move from the central bank is coming.
“He is going to move heaven and earth. Central-planning overlords, unite,” said Keith McCullough, chief executive officer at Hedgeye Risk Management, in emailed comments.
Comments from Draghi, which came after European markets had closed, and Federal Reserve Chairwoman Janet Yellen were brushed aside by Wall Street on Friday. Yellen stayed largely cagey about the timing of the next rate hike in the U.S.
“[Draghi] was dovish and, to a certain degree, while Yellen and the rest of the Fed members are preparing for a rate hike next year, the tone is still that easy money and so if you have a flow of easy money coming out of Europe, that is going to help equity markets here in the States as well,” said Peter Cardillo, chief market economist at Rockwell Global Capital.
Stocks to watch: Shares of Burger King Worldwide Inc. BKW, +1.01% moved up 7% in thin premarket trade after the company said it is in talks to buy Canadian coffee-and-doughnut chain Tim Hortons Inc. THI, +2.76% The deal would be set up as a so-called tax inversion, moving Burger King’s base to Canada.
Shares of InterMune Inc. ITMN, +36.39% could see action after Swiss-based Roche Holding AG RHHBY, -0.33% RO, +0.00% ROG, +0.19% said Sunday it will pay $8.3 billion for the California biotech firm.
Goldman Sachs Group Inc. GS, +0.18% may also draw attention after the investment bank agreed late Friday to a settlement worth more than $1.2 billion over claims it failed to disclose risks on mortgage banks it sold before the financial crisis hit.
Other markets: Monday is a holiday in the U.K. In Asia, the Nikkei 225 index NIK, +0.48% rose. The euro EURUSD, +0.00% fell against the dollar on that view of more ECB easing is in the cards as well as a survey that showed weaker German business confidence.
