Published June 11, 2012
FOX Business: The Power to Prosper
Stock-index futures signaled Wall Street may extend its rally into the new week after eurozone authorities said they would provide support for Spain's embattled banking sector.
As of 7:50 a.m. ET, Dow Jones Industrial Average futures gained 46 points to 12549, S&P 500 futures rose 4 points to 1326 and Nasdaq 100 futures climbed 9.3 points to 2566.
Spain said over the weekend that it plans on seeking up to $125 billion in aid from the 17-member eurozone to support its banks. There have been concerns for weeks that banks there that are laden with under-performing European sovereign debt and poorly-performing real estate loans could fail and potentially dramatically worsen that debt crisis.
In a statement, eurozone leaders said that they are "willing to respond favourably" to such a request. The move pushed many European markets higher by more than 1% on the day. However, the details remained murky, making many market participants very cautious. In particular, it remains unclear which rescue facility will be used to provide the loans. There is the temporary European Financial Stability Fund and the permanent European Stability Mechanism, both of which come with their own strings attached.
On top of that, elections that are likely to determine Greece's fate in the eurozone are scheduled for Sunday. Indeed, analysts at Nomura said in a note on Monday that many of its clients are "deeply reticent to put on large trading positions until that particular uncertainty is resolved."
Last week, the S&P 500 soared 3.7% in its best week of the year.
The docket of data on the U.S. economy is quite light over the first two days of the week. Later in the week, traders will get reports on retail sales, consumer sentiment, and the manufacturing sector.
Commodities were broadly higher on the back of the global move into riskier assets. The benchmark crude oil contract traded in New York rose 72 cents, or 0.86%, to $84.83 a barrel. Wholesale New York Harbor gasoline climbed 0.59% to $2.70 a gallon.
In metals, gold gained $2.20, or 0.14%, to $1,594 a troy once.
Traders sold U.S. Treasury bonds, pushing the yield on the 10-year higher by 0.05-percentage point to 1.644%.
The Euro Stoxx 50 jumped 1.5% to 2176, the English FTSE 100 gained 0.74% to 5475 and the German DAX rallied 1.6% to 6228.
In Asia, the Japanese Nikkei 225 soared 2% to 8625 and the Chinese Hang Seng surged 2.4% to 18954.