Stock futures rise on signs of European progress (Reuters)

January 31, 2012

NEW YORK (Reuters) – Stock index futures rose on Tuesday, with sentiment improving on signs of progress in dealing with Europe’s long-running sovereign debt crisis.

Optimism grew that Greece was nearing a debt swap deal, just a day after talks had stalled, lessening the odds of a messy default and possibly creating other shocks to the financial system.

Also boosting the market, European Union leaders agreed on a stricter budget discipline plan to prevent further debt build-up in the region.

Bank stocks, which have been pressured by setbacks in Europe, rallied in modest premarket trading. U.S-listed shares of Barclays Plc (BCS.N) rose 1 percent to $13.55 while Bank of America Corp (BAC.N) was up 1.1 percent to $7.15.

The pan-European FTSEurofirst 300 (.FTEU3) index of top shares rose 0.9 percent, putting European equities on track for their best month since October.

S&P 500 futures rose 5 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 55 points, and Nasdaq 100 futures put on 15 points.

The S&P is currently up 4.4 percent in January and having its best month since October, while the Dow is up 3.6 percent and recording its third straight months of gains. The Nasdaq is up almost 8 percent on strong results from technology companies.

Earnings will continue to be a key market driver. Eli Lilly & Co’s (LLY.N) profits beat expectations and the pharmaceutical company forecast a drop in 2012 earnings as a drug lost patent protection.

Pfizer Inc (PFE.N) and Archer Daniels Midland Co (ADM.N) also reported results early Tuesday.

Results are also due from Exxon Mobil Corp (XOM.N) and Inc (AMZN.O).

On the economic data front, the S&P/Case-Shiller home price index for November will be released at 9 a.m. EST and is seen improving slightly from the previous month.

Consumer confidence for January is seen rising to 68 from 64.5 in December, while the Chicago Purchasing Manager’s Index, also for January, is seen rising to 63 from 62.2 in the previous month. Consumer confidence is due at 10 a.m. EST, while Chicago PMI is expected at 9:45 a.m. EST.

U.S. stocks fell for much of Monday’s session on concerns about Europe, but an afternoon rally cut losses in a sign of the underlying resilience the market has shown early in the year. The S&P held above the psychologically important 1,300 level after crossing it for the first time in six months earlier in January.

(Reporting by Ryan Vlastelica; editing by Jeffrey Benkoe)

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