Stock Futures Rise as Budget Talks Spur Optimism
NEW YORK ( TheStreet) -- Stock futures were pointing to a higher open on Wall Street Monday amid hopes of positive developments in Washington on the U.S. budget talks and that more bailout money was on its way to Greece.
But nervousness stemming from the escalating tensions between Israel and Gaza's Hamas were keeping the markets in check.
Futures for the Dow Jones Industrial Average were rising by 49 points, or 67.69 points above fair value, at 12,619. Futures for the S&P 500 were advancing by 6.50 points, or 9.22 points above fair value, at 1366. Futures for the Nasdaq were climbing by 12 points, or 12.89 points above fair value, at 2545.
Investors will be watching Federal Reserve Chairman Ben Bernanke, who on Tuesday is expected to speak at the Economic Club of New York where he could provide more guidance on the central bank's next steps after the expiration of Operation Twist.
"Attention remains centered on the fiscal cliff," said Michala Marcussen, global head of economics at Societe Generale. "Recent developments give grounds for some cautious optimism, but history suggests that politics can be notoriously fickle. Our base case remains that a temporary extension is voted before year-end with a final agreement in early 2013. This will lift uncertainty and remove a significant headwind to recovery."
The major U.S. stock averages finished higher Friday as investors were cheered by positive commentary coming out of initial fiscal cliff discussions between President Barack Obama and congressional leaders.
The National Association of Realtors is expected to say at 10 a.m. EST that existing home sales were unchanged in October at a seasonally adjusted annual rate of 4.75 million.
The National Association of Home Builders housing market index is expected to remain unchanged at a level of 41.
"Activity in the housing market is now seen as a crucial area to gauge the efficacy of QE3," noted Geoffrey Yu and Gareth Berry, currency strategists at UBS. "In targeting MBS, market have widely acknowledged the Fed's success in unlocking access to the housing market, but so much of policy at this point still has absolute borrowing costs in mind, and any downside surprises in housing numberssuch as existing home sales will factor into the Fed's calculation in December."
The FTSE 100 in London was up by 1.05%, while the DAX in Germany was gaining 1.36%. Eurozone finance ministers are scheduled to hold a meeting in Brussels on Tuesday about extending more financial aid to Greece.
Japan's Nikkei average finished higher by 1.43% Monday amid rising anticipation of an opposition party victory in December, which is expected to result in the push for monetary easing.
Hong Kong's Hang Seng index settled up 0.49%.
Gold for December delivery was rising $9.20 at $1,723.90 an ounce at the Comex division of the New York Mercantile Exchange, while January crude oil contracts were up 96 cents at $87.88.