Stock futures rise after brutal Friday
NEW YORK — Stocks were set to bounce back modestly today after a brutal close to the previous week. Futures rose today.
Investors were ready to buy stocks in the first session after the Dow Jones industrial average plummeted 261 points. Stocks tumbled Friday as traders became concerned that future revenue at big banks like Citigroup Inc. and Bank of America Corp. could be hurt by new financial regulations and ongoing volatility in the market.
More insight into the banking sector will come this week when Wall Street giants Goldman Sachs Group Inc. and Morgan Stanley report results. As two of the largest investment banks, they could be facing the biggest effects of the recently passed financial reform regulation. The new regulations could restrict the types of trading the banks complete, which would reduce revenue and profitability.
Waning consumer confidence as the economic recovery sputters and unemployment remains high also added to disappointment Friday.
Earnings and corporate outlooks will likely be the primary driver of trading throughout the week again with only a few economic reports due out. Reports on housing starts and existing home sales, as well as weekly jobless claims data are expected later in the week.
Technology companies IBM and Texas Instruments Inc. help kick off this week’s round of earnings when they report results after the market closes.
Ahead of the opening bell, Dow Jones industrial average futures rose 53, or 0.5 percent, to 10,112. Standard & Poor’s 500 index futures rose 6.10, or 0.6 percent, to 1,069.20, while Nasdaq 100 index futures rose 11.00, or 0.6 percent, to 1,813.00.
Aside from the weak jobs market, the housing sector has been one of the main drags on a rebound. Home sales got a boost earlier this year because of a home buyer tax credit. But since that expired at the end of April, home sales have weakened. That has added to questions about whether of the pace of a recovery can pick back up in the coming quarters.
Economists predict both housing starts and sales of previously occupied homes fell again last month.
Stocks have also struggled mightily since government incentives and stimulus measures ended early this year. The Dow has dropped 10 percent since hitting its high for the year on April 26. Private industry growth and expansion has not replaced the government programs that helped boost economic output.
Bond prices dipped. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.94 percent from 2.93 percent late Friday.
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