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US STOCKS-Futures signal rebound, G8 assures investors
May 21, 2012 / 12:20 PM / 5 years ago

US STOCKS-Futures signal rebound, G8 assures investors

* World leaders back Greece, vow to combat crisis

* Fed’s Lockhart says circumstances not ripe for QE3

* Nasdaq revamps system after tech problems on Facebook IPO-WSJ

* Futures up: S&P 7.2 pts, Dow 80 pts, Nasdaq 17 pts

By Angela Moon

NEW YORK, May 21 (Reuters) - U.S. stock index futures rose on Monday after Wall Street posted its worst weekly loss for the year and on assurances that world powers want debt-laden Greece to remain in the euro zone.

On Saturday, G8 leaders stressed that their “imperative is to promote growth and jobs” and gave verbal backing for Greece to stay in the euro, but despite calls from the United States for immediate moves to boost growth, no sign emerged that Germany would soften its stance on austerity as the cure for Europe’s debt problems.

Wall Street was set for a rebound after U.S. stocks posted their worst weekly loss in a year on Friday, after a sloppy debut by Facebook disappointed investors. Facebook fell 2.4 percent to $37.35 in premarket trade on Monday.

“After the steep decline last week, the market seems to be in for a technical relief rally, and hopes of less austerity in Europe is fueling the market, at least in the short term,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

“But I don’t think we have seen the bottom here. I think we are in for a further decline.”

Yahoo will be in the spotlight after news that Chinese Internet entrepreneur Jack Ma is buying back up to half of a 40 percent stake in his Alibaba Group from Yahoo for $7.1 billion, in a deal that moves the Chinese e-commerce leader closer to a public listing. The stock was up 4.7 percent at $16.15 in premarket trade.

Newly issued shares in Facebook Inc may have a hard time in the coming week if lead underwriter Morgan Stanley stops supporting the stock and managers lower down in the IPO book who were hoping for an early surge decide to get out before going underwater.

The Nasdaq is planning to revamp its systems for handling stock offerings after acknowledging that technology problems had affected trading in millions of newly issued Facebook shares on Friday, the Wall Street Journal reported.

The U.S. economy needs “measured” efforts to bolster growth, but the central bank should focus on improving its communications because circumstances do not warrant further bond buying at this time, said Atlanta Federal Reserve Bank President Dennis Lockhart.

Wanda Group, one of China’s largest theater owners, has agreed to buy AMC Entertainment in a deal valued at $2.6 billion, creating the world’s biggest cinema operator, the companies said.

Lowe’s Cos Inc, the world’s second-largest home improvement chain, reported a higher-than-expected quarterly profit on strong spring sales. The company’s shares fell 5.2 percent to $27.00 in premarket trade.

S&P 500 futures rose 7.2 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 rose 80 points, and Nasdaq 100 futures added 17 points.

The chief executives of Apple Inc and Samsung Electronics Co Ltd come face to face on Monday in court-directed mediation in the United States over a dispute in which the iPhone maker claims the Korean firm has “slavishly” copied some of its products.

Chinese traders have defaulted on some thermal coal contracts following a drop in prices over the past month, traders said on Monday, providing more evidence that a slowdown in the world’s second-largest economy is hitting the appetite for commodities.

The coal defaults also come after sources at steel mills and traders said last week that some iron ore shipments had been postponed. China is the world’s biggest consumer of iron ore, coal and other base metals, but recent data has shown the economy cooling more quickly than expected.

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