Global General

Special

Newsmaker

Asia Pacific

America

Middle East

Europe

Africa

US stocks look to open higher on Citigroup plan

(Agencies)
Updated: 2008-11-24 23:33

NEW YORK -- Wall Street showed relief early Monday over the government's plan to bail out Citigroup Inc. - a move it hopes will help address some of the uncertainty hounding the financial sector. Stock index futures contracts indicated the market was poised to extend a sharp rally from Friday.

A giant American flag is reflected in the glasses of trader Bradley Silverman as he works on the floor of the New York Stock Excahnge, Friday, Nov. 21, 2008. [Agencies]

While the markets anticipated late last week that some sort of rescue was likely, investors appeared emboldened by the US government's decision late Sunday to invest $20 billion in Citigroup and guarantee $306 billion in risky assets. The move by the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp. is only the latest effort this year to support a banking system troubled by bad debt and flagging confidence.

Related readings:  US Stocks open higher after steep sell-off  US stocks dive to 7550, erasing 10 years' gains  US stocks plunge for third straight session  US stocks tumble, lose 10% in 2-day rout

Besides implementing its $700 billion bailout plan for the overall financial industry, the government has bailed out insurance giant American International Group Inc. and taken over lenders Fannie Mae and Freddie Mac.

Investors also cheered the idea that the government could introduce another economic stimulus plan. President-elect Obama is set to introduce his economic team on Monday, which is key to putting into place a huge economic recovery plan that targets saving or creating 2.5 million jobs during the next two years. A plan is expected to greatly exceed the $175 billion Obama proposed during the campaign.

The moves by the government to once again step in and help a troubled bank as well as the broader economy helped buoy investor sentiment and sent stock futures higher. However, investors remain extremely cautious, knowing that the nation still faces a difficult economy and that the stock market will see ongoing volatility for some time.

Dow Jones industrial average futures rose 125, or 1.56 percent, to 8,161. Standard & Poor's 500 index futures rose 21.60, or 2.73 percent, to 813.60. Nasdaq 100 index futures rose 18.50, or 1.70 percent, to 1,109.50.

The rise in futures follows a market surge Friday that saw the Dow industrials jump 494 points, or 6.5 percent. The other major indexes also rose sharply. Still, for the week, stocks ended lower after heavy selling Wednesday and Thursday.

Bond prices were mixed early Monday as investors examined the government's bailout plan for Citigroup. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.23 percent from 3.20 percent late Friday.

   Previous page 1 2 Next Page  

   Previous page 1 2 Next Page