New York - Wall Street stocks were set for a
higher open on Monday after a steep market decline last week as plans emerged to
ease Europe’s debt crisis, potentially offsetting geopolitical concerns after
the death of North Korea’s leader.
European officials will discuss a draft text of a new euro zone
“fiscal compact” later Monday that could be finalized by the end of January.
And having agreed to offer 150 billion euros to the International
Monetary Fund to raise its crisis-fighting capacity, officials will also
consider the size of individual bilateral loans to the fund.
“The market is doing pretty well this morning, and the support is
coming from the fact that (EU ministers) are seeking to draw more financial
support for the crisis though the IMF,” said Peter Cardillo, chief market
economist at Rockwell Global Capital in New York.
But trading could turn volatile as investors eyed developments in
North Korea after its reclusive leader, Kim Jong-il, died of a heart attack
while on a train trip.
“How things will develop in North Korea, including the succession
process, could be of concerns to investors but in the short term, it is a
mourning period and in this time, any provocation is highly unlikely,” said
Hong-sik Moon, analyst at South Korea’s Institute for National Security Strategy
based in Seoul.
Adding to worries, Fitch was the latest rating agency to warn it
may downgrade European sovereign debt. It said Friday that the ratings of France
and six other euro zone countries could be cut as a comprehensive solution to
the region’s debt crisis was “technically and politically beyond reach”.
Asian stocks dropped after Kim’s death was reported, while European
shares reversed early losses and were up nearly 1 percent, halting a sharp 1-1/2
week selloff, as investors bought up shares in defensive sectors.
S&P 500 futures rose 5.1 points and were above fair value, a
formula that evaluates pricing by taking into account interest rates, dividends
and time to expiration on the contract. Dow Jones industrial average futures
rose 54 points, and Nasdaq 100 futures added 14 points.
Major S&P 500 levels to watch this week were 1,200 and 1,260,
said Ari Wald, an analyst at BBH Equity Strategy Research Team in New York.
“1,200 is support from the index’s downward sloping 100-day moving
average and the uptrend connecting its October and November lows. A breach of
this demand could stir additional technical selling to 1,130-1,150
intermediate-term support,” he said.
“1,260 is resistance from the index’s downward sloping 200-day
moving average and the downtrend connecting its October and December peaks. A
breakout above this supply would argue for continued seasonal strength through
the first quarater of 2012.”
A tax break for 160 million U.S. workers was in doubt in the face
of strong opposition from U.S. House of Representatives Republicans who have
rejected a two-month extension that was overwhelmingly approved by the Senate
over the weekend.
Saudi billionaire investor Prince Alwaleed bin Talal on Monday said
he bought a $300 million stake in fast-growing microblogging site Twitter,
gaining another foothold in the global media industry.
All Nippon Airways, the first operator of Boeing Co’s 787
Dreamliner, will postpone the start of Dreamliner service on some international
routes due to a delay in receiving another of the planes. Boeing shares were
unchanged in premarket trade.
Procter & Gamble Co, the world’s largest maker of household
products, has halted full-time hiring for this fiscal year, a company
spokeswoman said, confirming an earlier report.
Talks over potential asset sales as part of AT&T Inc’s efforts
to get approval of its $39 billion purchase of T-Mobile USA have gone cold, the
Wall Street Journal reported.
On the macroeconomic side, investors awaited the National
Association of Home Builders’ December housing market index, due at 10:00 a.m.
EST (1500 GMT). Economists in a Reuters survey expected the index to be
unchanged at 20.
A rally in U.S. stocks fizzled on Friday, leaving major indexes
with modest gains as investors again were torn between hope the U.S. economy was
improving and fears over Europe’s debt crisis.