Stock futures climb ahead of opening
Stock futures rose Monday following AIG’s biggest asset sale since being rescued by the government and reports of a new bailout package for Greece.
Investors are also preparing for a key report on the manufacturing sector.
Overseas markets rallied on growing hope that European nations will announce a bailout deal to help Greece with its mounting debt problems. Stocks around the world have been hurt in recent weeks because of concerns debt problems in Greece would spread to other countries and upend any possibility of a global recovery.
European Union and Greek officials are meeting and a deal could be hammered out soon that would involve state-owned banks in Europe buying Greek government bonds. Greece must roll much of its debt in the coming months.
The market is also getting a lift after American International Group Inc. agreed to sell its Asian life insurance business to Britain’s Prudential PLC for $35.5 billion. It’s the biggest deal yet made by AIG since it received multiple bailout packages from the government during the credit crisis.
AIG, based in New York, had been planning to sell the division, known as AIA Group, as part of its ongoing plans to streamline operations and repay the government. As of Dec. 31, AIG’s outstanding assistance from the government totaled $129.26 billion.
AIG reported disappointing fourth-quarter results Friday, which tempered gains in the market.
Ahead of the opening bell, Dow Jones industrial average futures rose 28, or 0.3 percent, to 10,339. Standard & Poor’s 500 index futures rose 3.20, or 0.3 percent, to 1,106.60, while Nasdaq 100 index futures rose 5.25, or 0.3 percent, to 1,823.75.
AIG shares rose $3.43, or 13.8 percent, to $28.20 in pre-opening trading.
Traders will also get a key reading on the manufacturing sector. The Institute for Supply Management’s closely watched manufacturing index likely fell in February to 57.5 from a reading of 58.4 a month earlier, according to economists polled by Thomson Reuters. Any reading above 50 indicates growth. The report is due to be released at 10 a.m. EST.
The manufacturing sector has steadily improved in recent months as the economy begins to recover.
The ISM releases its service-sector index reading on Wednesday.
A separate report released before the market opening Monday showed personal income rose 0.1 percent in January, short of the 0.4 percent expected by economists. However, spending grew faster than forecast, rising 0.5 percent, the Commerce Department said. Economists had forecast spending would rise 0.4 percent.
It was the slowest growth in income in fourth months, which could slow spending in the future. Consumer spending accounts for about 70 percent of U.S. economic activity.
Stocks edged out modest gains Friday to close the best month of trading since November. The Dow Jones industrial average rose 2.6 percent last month.
Despite the overall climb during February, mixed economic reports had stocks rallying and retreating throughout the month. Disappointing reports on home sales and new claims for jobless benefits have investors a bit on edge that an economic recovery might be slow and uneven.
A collapse of the housing market helped push the economy into recession and high unemployment remains one of the biggest stumbling blocks to sustained growth.
The Labor Department releases its monthly report on employment Friday. The unemployment rate likely rose to 9.8 percent in February from 9.7 percent a month earlier.
Meanwhile, bond prices were little changed Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged at 3.62 percent compared with late Friday.
The dollar rose against other major currencies, while gold prices traded in a narrow range.
Overseas, Japan’s Nikkei stock average rose 0.5 percent. Britain’s FTSE 100 gained 0.3 percent, Germany’s DAX index rose 1.1 percent, and France’s CAC-40 climbed 0.7 percent.