Stock Futures Rise as Traders Focus on Europe

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U.S. stock-index futures drifted higher on Monday morning as traders paid close attention to developments on Europe's debt crisis.

Today's Markets

As of 9:10 a.m. ET, Dow Jones Industrial Average futures rose 22 points to 12332, S&P 500 futures gained 1.3 points to 1276 and Nasdaq 100 futures climbed 8.8 points to 2361.

The markets kicked off the first trading week of the year with a rally, with the broad S&P 500 jumping 1.6%. A round of strong data on the U.S. economy, capped with a better-than-expected monthly employment report, lifted traders' sentiment.

With the economic calendar fairly light on the day, Europe's twin debt and banking crises have taken the spotlight. German Chancellor Angela Merkel and French President Nicolas met in Berlin to discuss a plan crafted last month to push for closer fiscal ties among members of the euro zone ahead of a European Union summit on January 30.

The two leaders said discussions on the fiscal pact are moving along well, without providing many specific details, according to Dow Jones Newswires. Additionally, Sarkozy did not provide comment on speculation France may see its pristine credit rating cut, the report from Dow Jones said.

Leaders have been attempting to keep the two-year-old debt crisis from worsening, but its affects can already be seen across several markets. Italy's 10-year bonds recently yielded 7.12%, meaning Europe's third-biggest economy may be forced to pay hefty borrowing costs as it tries to refinance billions of euros in debt this year.

The euro, meanwhile, has been hovering about its lowest levels since September 2010. The single currency recently climbed 0.4% to $1.2768. The dollar fell 0.92% against six trading partners.

On the corporate front, Alcoa (NYSE:AA) is set to post its quarterly earnings after the bell on Monday, unofficially kicking off earnings season. The biggest U.S. aluminum maker also said Monday it will slash its global smelting capacity by 12%, potentially affecting up to 1,500 workers.

The economic calendar is light on the day, with a report from the Federal Reserve on consumer credit conditions slated for release in the afternoon.

Energy futures were modestly to the downside. The benchmark crude oil contract traded in New York fell 52 cents, or 0.51%, to $101.04 a barrel. Wholesale RBOB gasoline slipped 0.13% to $2.748 a barrel.

In metals, gold fell $5.10, or 0.32%, to $1,611 a troy ounce.

Foreign Markets 

European blue chips fell 0.12%, the English FTSE 100 dipped 0.3% to 5,632 and the German DAX slipped 0.5% to 6,028.

In Asia, the Japanese Nikkei 225 sold off by 1.2% to 8,390 and the Chinese Hang Seng rallied 1.5% to 18,866.