MW: U.S. stocks: Futures rally amid ECB QE chatter
MADRID (MarketWatch) — U.S. stock futures pointed to a sharply higher open for Wall Street on Monday, tracking gains in Europe, where stocks surged on reports the European Central Bank’s bond-buying plan is taking shape.
Strategists said investors also were wading back into markets on the heels of last week’s selloff.
Futures for the Dow Jones Industrial Average DJH5, +0.38% rose 90 points, or 0.5%, to 17,739, while those for S&P 500 futures SPH5, +0.58% added 11.10 points, or 0.6%, to 2,046.40. Futures for the Nasdaq-100 index NDH5, +0.58% jumped 23.25 points, or 0.6%, to 4,224.
The Stoxx Europe 600 index SXXP, +1.06% surged 1% after CNBC reported, citing sources, that the ECB is planning a quantitative-easing program that could be based on contributions made by central banks into the ECB.
Read more in European Stocks.
Much of the move seen in U.S. futures is indeed linked to that, said Wouter Sturkenboom, strategist at Russell Investments in London. But he also credited some of the gains to a counter-reaction to Friday’s move. Stocks finished last week slightly lower, with the S&P 500 SPX, -0.84% backing off 0.8% on Friday after the December jobs report revealed a fall in wages.
The only data of note for Monday is the labor-market conditions index for December at 10 a.m. Eastern.
“Once things calm down, markets tend to regain some of the losses,” said Sturkenboom.
Oil still a worry: Still, Sturkenboom said the fall in oil prices Monday leaves him wary. Crude fell sharply, triggered by sharp cuts by Goldman Sachs to its oil-price projections. The investment bank slashed its Nymex 2015 crude forecast to $47.15 a barrel from $73.75 a barrel, and cut its Brent estimate to $50.40 a barrel from $83.75 a barrel.
“We’re seeing another big down day in oil and oil prices and that’s something we continue to watch closely, and we are basically cautious regarding markets in general as long as oil prices don’t stabilize,” said Sturkenboom.
See Need to Know: Engage sick bags as stormy markets show no signs of calm
Alcoa and Foundation Medicine stocks to watch: The focus will also shift to the earnings season, as Alcoa AA, +1.32% reports after the bell and a bevy of big banks follow beginning midweek. Earnings for the fourth quarter are tapped to have increased 1.1%, according to FactSet, less than the 1.6% gain estimated at the end of the fourth quarter.
Deal news marked Monday. Shares of Foundation Medicine Inc. FMI, +107.06% doubled in premarket action after Roche Holding AG ROG, +2.16% RHHBY, +0.50% said it would pay $1.03 billion for up to a 56.3% stake in the maker of molecular diagnostics tests. Roche will pay $50 a share, a 109% premium over Foundation’s closing price of $23.93 on Friday.
Shares of NPS Pharmaceuticals Inc. NPSP, -2.35% surged 9% in premarket after Dublin-based Shire PLC SHPG, +1.59% SHP, -0.42% said it would buy the specialty drug maker in a $5.2 billion deal.
Tekmira Pharmaceuticals Corp. TKMR, +5.09% surged 20% in premarket. The company announced late Sunday that it will merge with OnCore Biopharma Inc. to develop a cure for hepatitis B.
While Alcoa reports after the bell, Tiffany & Co. TIF, -1.61% is due to report holiday sales ahead of the market’s open.
Other markets: In Asia, the Hang Seng Index HSI, +0.45% extended a winning streak to four sessions, while Japanese markets were closed for a public holiday. Gold prices GCG5, +0.44% rose, while the euro EURUSD, -0.32% slipped on those reports about the ECB quantitative-easing program.
