US futures up sharply, reflect gains overseas

[August 03, 2009]  NEW YORK (AP) -- U.S. stock futures are sharply higher, buoyed by broad gains in overseas markets fueled by fresh signs the global economy is on the mend and solid reports from European banks. The combination is giving investors a burst of optimism.

In other signs of investors' growing confidence, safe-haven assets like Treasurys and the U.S. dollar are falling, while oil and other commodities prices are rising.

Barclays PLC said its first-half net profit increased 10 percent on stronger earnings from its investment banking division. Still, losses from bad loans rose as consumers in both the U.S. and Britain had trouble repaying debt.

Meanwhile, in the U.S., health insurer Humana Inc. said its second-quarter profit rose 34 percent on higher premiums.

Investors are awaiting more reports from companies such as Marathon Oil Corp. and Tyson Foods Inc. as well as data on the manufacturing and construction industries. Later in the day, following the close of trading, reports from homebuilders Centex Corp. and Pulte Homes Inc. will be closely watched. The battered housing sector has shown some recent signs of healing.

The gains in futures come on the heels of the market's best July in 20 years. The Dow Jones industrials surged 725 points, or 8.6 percent, last month as more and more economic and corporate earnigns reports suggested investors' bets on an improving economy are well-founded. It was the best month for the blue chips since October 2002 and the best July since 1989.

Ahead of the market's open, Dow Jones industrial average futures rose 95, or 1 percent, to 9,221. Standard & Poor's 500 index futures are up 11.10, or 1.1 percent, to 995.50, while Nasdaq 100 index futures are up 23, or 1.4 percent, to 1,625.

Overseas, Hong Kong's Hang Seng index rose 1.1 percent, while Japan's Nikkei stock average slipped 0.04 percent. In late morning trading, Britain's FTSE 100 rose 1.7 percent, Germany's DAX index rose 1.8 percent, and France's CAC-40 was up 1.5 percent.

Safe-haven assets like the dollar and government bonds dropped sharply on Monday. The dollar was lower against other major currencies, including the Japanese yen and the British pound. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 3.56 percent from 3.48 percent late Friday.

Meanwhile, oil and other commodities prices rose. Commodities traders were heartened by news that manufacturing in China is expanding, a sign of support for industrial materials like copper.

Light, sweet crude gained $1.13 to $70.58 a barrel in electronic trading on the New York Mercantile Exchange.

[Associated Press; By SARA LEPRO]

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