Barefoot Investor: U.S. Stock-Index Futures Rise Amid Optimism Greece Will Avert Debt Default

U.S. stock futures rose, indicating the Standard & Poor’s 500 Index will rally a fourth straight day, amid optimism Greece will avoid a debt default.

Wells Fargo & Co. (WFC) and JPMorgan Chase & Co. (JPM) each added 0.3 percent as people familiar with the matter said Germany’s biggest banks and insurers and the government agreed on a draft proposal to roll over Greek debt holdings. EBay Inc. (EBAY), the largest online marketplace, gained 4.7 percent after Bank of America Corp. and Citigroup Inc. recommended buying the shares.

S&P 500 futures expiring in September added 0.2 percent to 1,307.20 at 8:50 a.m. in New York. The benchmark gauge had risen 3.1 percent over the last three days. Dow Jones Industrial Average futures gained 29 points, or 0.2 percent, to 12,247.

“The big driver behind the rally has certainly been Greece,” said Peter Jankovskis, who helps manage about $2.7 billion at Oakbrook Investments in Lisle, Illinois. “The implementation of an austerity plan is certainly an important step. That should be less of an overhang for the market in July.”

The Dow average has fallen 2.5 percent in June through yesterday amid concern about Europe’s debt crisis and weaker- than-expected economic data. Over the last century, the 30-stock gauge had an average gain of 1.4 percent in July, according to data compiled by Bespoke Investment Group. On average, the Dow has returned 0.9 percent and 1.5 percent, respectively, over the last 50 years and 20 years, the data showed.
Greek Aid Package

Global stocks rose today on expectations that Greece will avoid defaulting on its debt. The firms will commit to providing financing for a Greek aid package, said the people, who declined to be identified because the talks are private. The draft, which may change during the meeting between Germany Finance Minister Wolfgang Schaeuble and industry executives, left open how much debt would be rolled over and under what conditions, they said.

Stock-futures maintained gains before the open of regular trading after a report showed that more Americans than forecast filed applications for unemployment benefits last week, indicating little progress in the labor market.

Jobless claims fell by 1,000 to 428,000 in the week ended June 25, Labor Department figures showed today in Washington. The median forecast of economists in a Bloomberg News survey called for a drop to 420,000. The number of people on unemployment benefit rolls and those getting extended payments declined.

Wells Fargo gained 0.3 percent to $28.15. JPMorgan rose 0.3 percent to $40.57.

EBay climbed 4.7 percent to $32.30. The owner of e-commerce sites and the PayPal online payment service was raised to “buy” from “neutral” at Bank of America. Citigroup also lifted its recommendation for EBay, raising it to “buy” from “hold.” (Bloomberg)


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