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Wall St set to open higher on euro zone progress
Traders work on the main trading floor of the New York Stock Exchange November 10, 2011. Stocks rebounded on Thursday, a day after the S&P 500 suffered its worst day since mid-August as Italian bond yields eased.
Credit: Reuters/Mike Segar
NEW YORK |
NEW YORK (Reuters) - Stocks were poised for a higher open on Friday as debt-laden Italy moved to implement tough austerity measures crucial to avoid a euro zone meltdown.
Italian bond yields fell sharply after Italy's Senate approved economic reforms Friday. The package of austerity measures demanded by the European Union now goes to the lower house, which is expected to approve it on Saturday.
Passage will trigger the resignation of Prime Minister Silvio Berlusconi, and former European Commissioner Mario Monti is widely expected to take over as head of a broadly based national unity government. European shares jumped 1.4 percent .EU
In Greece, the prime minister designate, Lucas Papademos, will name a new crisis cabinet to roll out austerity plans.
"Berlusconi has basically put the condition of his leaving as passing the austerity budget, so if the opposition wants him out, they have to pass the austerity budget," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
"If Monti comes in, that's what the market wants, just as the ex-vice chair of the ECB is what the market wanted for Greece. So if they can put in these people who have economic expertise or ties to the EU, then they know the people they are working with on the other side and maybe they can figure out how to get through this."
S&P 500 futures rose 15.1 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures climbed 120 points, while Nasdaq 100 futures gained 21 points.
Walt Disney Co (DIS.N) advanced 3.6 percent to $35.90 in premarket after the media and entertainment group reported a 7 percent gain in revenues and a 30 percent jump in profit, trumping expectations.
Nvidia Corp's (NVDA.O) shares climbed 1.9 percent to $14.75 in premarket trade after the chipmaker posted quarterly results that beat estimates as it refocused on smartphones and tablets in a tepid personal computer market.
Caterpillar Inc (CAT.N) will offer to buy China's ERA Mining Machinery (8043.HK) in a deal that could be worth up to $885 million. Shares rose 1.1 percent to $93.22.
On the economic front, Thomson Reuters/University of Michigan Surveys of Consumers preliminary November consumer sentiment index is due to be released at 9:55 a.m. EST (1455 GMT). A Thomson Reuters poll found a forecast for a reading of 61.5 compared with 60.9 in the final October release.
(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)
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Too often optimistic investors seem to be looking for an excuse for the market to go up. For example, every time Eurozone ministers meet and announce progress the market goes up. A short time later, we find that nothing has really been done. They have only agreed on what the problem is or they might have agreed that something needs to be done about it or they might have agreed to do something about a problem or they might have agreed that this measure or that measure might work or they might have agreed to attempt to implement one measure or another knowing full well that the measure has little or no chance of being approved by the countries who would need to approve it… etc, etc ad nauseum.
Why should I believe that the politicians who comprise the Italian Parliament are so much more determined, pragmatic, clever, and honorable than the rest of the world’s politicians? Why should I believe that these measures can make a difference?
I’d like to see some details… not just headlines and fluff.
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