Wall Street heads to higher open on China stimulus

[November 10, 2008]  NEW YORK (AP) -- Wall Street headed for a higher open Monday, boosted by hopes that China's $586 billion economic stimulus package will help ease symptoms of the global recession.

Futures trading in the Dow Jones industrial average and broader market indexes rose more than 2.5 percent ahead of the opening bell in New York. The move higher follows a rally in Asia and Europe after China announced plans to boost its economy through a mix of spending, subsidies, looser credit policies and tax cuts.

Also boosting U.S. markets, the government on Monday provided new financial assistance to troubled insurance giant American International Group Inc., including pouring $40 billion into the company in return for partial ownership. The action was announced jointly by the Federal Reserve and the Treasury Department. All told, the moves, on top of the bailout of AIG announced in September, boost aid to the company to around $150 billion.

Investors are also watching for developments with General Motors Corp., Chrysler and Ford Motor Co. after the automakers met with congressional leaders last week in hopes of securing financial help.

Democratic leaders in Congress asked the Bush administration on Saturday to provide more aid to the struggling auto industry, which is losing money and jobs as sales have dropped to their lowest level in a quarter century. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid said in a letter to Treasury Secretary Henry Paulson that the administration should consider expanding the $700 billion bailout program to include car companies.

Dow futures jumped 184, or 2.72 percent, to 9,180. Standard & Poor's 500 futures rose 24.90, or 2.66 percent, to 961.20. Nasdaq 100 index futures added 31.25, or 2.43 percent, to 1,319.75.

Last week, the major indexes each lost about 4 percent. Trading this week is expected to remain volatile, but analysts have predicted the market will remain turbulent as it tries to recover from October's devastating losses.

With no major economic data due during the session, investors will turn to corporate news for direction. Investors later this week will pore over a stream of reports, including retail sales, the labor market and consumer sentiment.

Overseas, Japan's Nikkei stock average closed up 5.81 percent, and Hong Kong's Hang Seng index added 3.52 percent. In Europe, the Britain's FTSE 100 rose 3.27 percent, Germany's DAX added 3.42 percent, and France's CAC-40 rose 3.74 percent.

Oil prices jumped above $63 a barrel Monday in Asia as regional stock markets rallied on China's economic stimulus plan, which could underpin demand for crude. A barrel of light sweet crude rose $3.27 to $64.31 in electronic trading on the New York Mercantile Exchange.

[Associated Press; By JOE BEL BRUNO]

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