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US STOCKS-Futures gain before data, focus shifts from Cyprus
March 19, 2013 / 12:30 PM / 5 years ago

US STOCKS-Futures gain before data, focus shifts from Cyprus

* Cyprus aims to exempt small savers from deposit tax

* U.S. housing starts on tap

* Futures: S&P up 3.7 pts; Dow up 20 pts; Nasdaq off 9 pts

By Angela Moon

NEW YORK, March 19 (Reuters) - U.S. stock index futures edged up on Tuesday, after two days of declines, as investors’ focus shifted away from developments in Cyprus that may lead the country into default.

“I don’t think the situation is Cyprus is going to renew fears of a euro zone crisis and in the worst case scenario, it will be limited to certain sectors,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

“It served as a good reason for investors to sell after this strong rally. Now, the market is shrugging it off.”

Cyprus’s parliament was set to reject a divisive tax on bank deposits in a vote scheduled for Tuesday, a government spokesman said. The government has proposed to spare small savers from the tax in a bid to win parliamentary backing for an international bailout and avoid default and a banking collapse.

A weekend announcement that Cyprus would break with previous practice and impose a levy on bank accounts as part of a 10 billion euro ($13 billion) EU bailout prompted some turmoil on European financial markets on Monday.

Investors awaited U.S. housing starts and permits data for February, due at 8:30 a.m. EDT (1230 GMT). Economists surveyed by Reuters forecast a 915,000 annualized rate in February versus 890,000 in January, and a total of 925,000 permits in February compared with 904,000 in the prior month.

S&P 500 futures added 3.7 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 added 20 points and Nasdaq 100 futures gained 9 points.

The market had ended lower on Monday after a plan to tax bank accounts in Cyprus to help pay for the country’s bailout stoked worries that it could threaten the stability of financial institutions in the euro zone. On Friday, the Dow ended a 10-day winning streak as investors booked recent profits.

Citigroup Inc agreed to pay $730 million to settle a class action lawsuit on behalf of investors who said they were misled by the company’s disclosures. The stock was up 0.3 percent in premarket trade.

Drugmaker Affymax Inc said it was considering selling itself or filing for bankruptcy among a range of alternatives, as it struggles to stay afloat following the recent recall of its sole commercial product, the anemia drug Omontys. The stock plunged 57.5 percent to $1.23.

BlackRock Inc, the world’s largest money manager, will lay off nearly 300 employees, or about 3 percent of its workforce, according to an internal memo obtained by Reuters.

Boeing Co technical workers voted by a wide margin to ratify a new four-year labor agreement with the company, ending the possibility of a strike that could have cut production at a critical time for the aircraft maker.

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