China Rate Cut Lifts Stock Futures

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China's surprise cut of its benchmark lending and deposit rates added more fuel to optimism that policymakers will take action to reinvigorate the stalling world economy, sending U.S. stock-index futures higher.

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Today's Markets

As of 8:35 a.m. ET, Dow Jones Industrial Average futures climbed 64 points to 12483, S&P 500 futures gained 9.8 points to 1325 and Nasdaq 100 futures rose 14.8 points to 2565.

The Dow and S&P 500 both had their best performance of the year on Wednesday amid hopes central bankers will unleash fresh stimulus in the form of quantitative easing or rate cuts. On the European front, the European Central Bank and Bank of England both held their monetary policy steady following their meetings this week. However, the cut from China, the world's second-biggest economy, helped keep the bullish sentiment alive.

The People's Bank of China cut its benchmark lending and deposit rates by 0.25-percentage point in the hopes of keeping the economic expansion there from cooling down too quickly. Additionally, the PBOC said that it will allow the deposit rate to climb by 110% of the benchmark and the lending rate fall to 80% of the benchmark.

This comes as some economists have worried that the economy is in for so-called "hard landing" that could be damaging to many global economies because of China's size.

U.S. Federal Reserve Chairman Ben Bernanke is set to testify before the Congressional Joint Economic Committee at 10:00 a.m. ET. It will be the Fed chief's first chance to publicly react to the dismal May jobs report released last week. Analysts are growing increasingly hopeful that he will hint that additional quantitative easing may be on the way in light of new economic headwinds.

Wall Street also got fresh data on the labor market. New claims for unemployment benefits fell to 377,000 last week, as expected, from an upwardly revised 389,000 the week prior, the Labor Department reported. Claims for the week prior were originally reported at 383,000.

Oil prices got a lift from the news of China's rate cut. The benchmark contract traded in New York jumped $1.36, or 1.6%, to $86.40 a barrel. Wholesale New York Harbor gasoline climbed 0.77% to $2.71 a gallon.

In metals, gold fell $6.00, or 0.37%, to $1,629 a troy ounce.

Foreign Markets

The Euro Stoxx 50 jumped 1.1% to 2161, the English FTSE 100 rallied 1.5% to 5462 and the German DAX gained 1.3% to 6172.

In Asia, the Japanese Nikkei 225 climbed 1.2% to 8640 and the Chinese Hang Seng rose 0.85% to 18678.