* China stimulus plan seen sparking demand
* AIG rises on news of government investment
* GM slides after brokerage recommends sell
(Recasts first paragraph, updates prices)
By Ellis Mnyandu
NEW YORK, Nov 10 U.S. stocks headed for a
higher open on Monday, with big exporters including General
Electric (GE.N) , set to lead gains following China's plan of a
multibillion economic stimulus to shore up the world's fourth
GE shares jumped 3 percent to $19.40 before the bell after
China approved on Sunday $586 billion in new government
spending between now and 2010, focused largely on
infrastructure and social projects. For details, see
In another boost to sentiment, shares of American
International Group (AIG.N) rose more than 40 percent to $3.03
before the bell after the U.S. Federal Reserve hiked its
support for the insurer to about $150 billion after an initial
bailout attempt failed to stem massive losses. [ID:nLA322782].
Equity markets around the world jumped as the prospect for
recharged growth tempered fears about a deep global recession.
Japan's Nikkei .225 rose nearly 6 percent overnight, and
benchmark indexes in Europe were up 2 percent or more.
"Part of what we've been concerned about as we look at this
global recession was what was China's response going to be,"
said Arthur Hogan, chief market analyst at Jefferies & Co in
Boston. "We believe China is standing firmly behind their
economy and that's going to help. The first move was the pop we
saw in the price of oil."
S&P 500 futures SPc1 rose 13.10 points and were above
fair value, a formula that evaluates pricing by taking into
account interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures DJc1 climbed
104 points, and Nasdaq 100 NDc1 gained 13.50 points.
Any stabilization in Chinese demand could be a boon for big
U.S. manufacturers and exporters, including Caterpillar Inc
(CAT.N) , Boeing Co (BA.N) and GE, as they grapple with a
deepening economic downturn at home. All three are constituents
of the Dow.
The Fed said the new measures would help AIG establish a
more durable capital structure, resolve liquidity issues and ,
facilitate its plans to sell certain businesses in an orderly
manner that promote market stability. They will also protect
the interests of the U.S. government and taxpayers.
But shares of General Motors (GM.N) declined 11.7 percent
to $3.86 before the bell after Deutsche Bank cut the auto maker
to "sell" from "hold." According to theyflyonthewall.com, the
brokerage also slapped the stock with a zero price target.
(Editing by Kenneth Barry)