Stock futures up on optimism over budget talk
By Angela Moon | November 20, 2012 12:35 AM EST
Stock index futures started a holiday-shortened week higher on Monday, with signs of progress in Washington talks to resolve the fiscal crunch lifting investors' mood.
Leading Democratic and Republican lawmakers expressed confidence on Sunday that they could reach a deal to avert the "fiscal cliff" even as they laid down markers on raising taxes and spending cuts that may make any agreement more difficult. European stocks also reacted by rising from a 3 1/2-month low.
Democratic Senator Dick Durbin said on CNN, "What I hear is a perceptible change in rhetoric from the other side."
Also appearing on CNN, Republican Representative Tom Price said, "Every member of our caucus appreciates that this fiscal crisis, this challenge that we have, is ever closer." Opinion polls show that Republicans would shoulder more of the blame if the country goes over the fiscal cliff.
"A deal that doesn't face healthcare spending head on and also raises taxes of substance with economic growth mediocre is not a good deal. This said, the markets will celebrate any deal in the short term but will likely deal with the economic consequences in 2013," said Peter Boockvar, managing director at Miller Tabak & Co in New York.
S&P 500 futures rose 7.4 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 61 points and Nasdaq 100 futures rose 16 points.
Investors awaited data on existing-home sales for October, due at 10 a.m. (1500 GMT). Economists in a Reuters survey forecast an annualized 4.75 million units, a repeat of the September total. Investors also eyed the November NAHB housing market index, also at 10 a.m. (1500 GMT).
Shares of Lowe's Cos Inc
Networking equipment company Cisco Systems Inc
General Motors Co
Wal-Mart Stores Inc
Online financial services company ETrade Financial Corp
Hope that U.S. politicians would find common ground to steer clear of the "fiscal cliff" boosted stocks on Friday, though the gains were not enough to offset the week's losses.
(Reporting by Angela Moon; Editing by Kenneth Barry)