Stock Futures Point to Slightly Higher Wall Street Open
NEW YORK ( TheStreet) -- Stock futures were a touch higher Tuesday amid further signs of gridlock in talks over the "fiscal cliff" in the U.S. and as investors awaited more clarity on the issue of a single banking supervisor for the European Union.
Futures for the Dow Jones Industrial Average were rising 14 points, or 15.40 points above fair value, at 12,964. Futures for the S&P 500 were up 1.60 points, or 1.14 points above fair value, at 1408. Futures for the Nasdaq were up 2.75 points, or 3.31 points above fair value, at 2672.
In one of the latest developments in the U.S. budget negotiations, the White House rejected a counteroffer by Republicans Monday on tax and spending cut proposals, explaining that it would not fulfill President Barack Obama's promise to increase tax rates on the richest Americans.
"In recent years, negotiations over fiscal policy have followed a familiar pattern," said Jeremy Lawson, senior economist at BNP Paribas. "Phase 1 (the honeymoon) involves Democrats and Republicans making soothing noises about the importance of working together and expressing guarded optimism about getting a deal done. This quickly gives way to Phase 2 (the confrontation), during which both parties' rhetoric hardens as they play to their bases and seek to gain the upper hand in the court of public opinion. Phase 3 (the bargain) only begins at the 11th hour when the two sides take negotiations more seriously as they try to avoid an outcome that neither party really wants."
"The latest news on the fiscal cliff negotiations suggests that we have moved into the confrontation phases," said Lawson.
The major U.S. stock averages fell Monday after a slump in manufacturing outweighed upbeat eurozone developments and manufacturing data from China.
No major U.S. economic releases were scheduled for Tuesday.
The FTSE 100 in London was up 0.04% on Tuesday, while the DAX in Germany was rising by 0.32% as investors awaited developments from the European Union finance ministers meeting in Brussels on the topic of a European Union single banking supervisor. Reportedly, so far there has been much friction between member states over the details of the plan.
Asian markets finished mixed as investors digested the weak U.S. manufacturing report from Monday and the stalemate in the budget negotiations. Japan's Nikkei average closed down 0.27% and Hong Kong's Hang Seng index finished up by 0.15%.
Gold for February delivery was plunging $16.90 at $1,704.20 an ounce at the Comex division of the New York Mercantile Exchange, while January crude oil contracts were down 75 cents at $88.34 a barrel.
The benchmark 10-year Treasury was down 2/32, pushing the yield up to 1.632%. The dollar was off 0.25%, according to the U.S. dollar index.