US stock futures rise following overseas gains

[June 01, 2009]  NEW YORK (AP) -- U.S. stock futures pointed higher Monday as data on the manufacturing industry added to hopes that the global economy may soon recover.

Investors looked to extend the market's rally into a fourth month, taking a cue from overseas markets, which surged following surveys in Europe and Asia that showed the manufacturing sector is on the mend. Investors are awaiting a similar survey on the U.S. manufacturing industry later Monday morning.

Analysts expect the Institute for Supply Management to report that its purchasing managers' index rose to 42.0 in May from April's 40.1. Anything below 50 indicates contraction, but the reports in Europe and Asia are fueling hopes of an even bigger increase than analysts are forecasting.

The gains came despite General Motors Corp.'s impending bankruptcy filing.

The move, which has been highly anticipated, will give the government a 60 percent stake in the ailing automaker. The government is expected to provide GM with an additional $30 billion, on top of $20 billion in government loans GM has already received, to help it restructure. Meanwhile, rival Chrysler LLC, which filed for Chapter 11 protection in April, is expected to emerge from its government-sponsored bankruptcy this week.

Investors will also look to reports from the Commerce Department on personal income and spending, as well as construction spending, for April later Monday morning.

Ahead of the market's open, Dow Jones industrial average futures rose 121, or 1.4 percent, to 8,609. Standard & Poor's 500 index futures rose 15.30, or 1.7 percent, to 933.40, while Nasdaq 100 index futures gained 20, or 1.4 percent, to 1,455.50.

Overseas, Japan's Nikkei stock average jumped 1.63 percent, while Hong Kong's Hang Seng index soared 3.95 percent. In European trading, Britain's FTSE 100 was up 1.68 percent in late morning trading, while Germany's DAX index rose 3.19 percent and France's CAC-40 gained 2.44 percent.

Stocks have wavered in recent weeks as investors question the sustainability of the market's stunning three-month advance; Since March 9, the Dow is up 29.8 percent, the S&P 500 index is up 35.9 percent and the Nasdaq is higher by 39.9 percent.

On Friday, Wall Street sealed the third month of its spring rally with a huge jump, with all the major indexes rising at least 1.2 percent.

But the market is still well off its October 2007 peak. The recession has cut into the Dow by 40 percent, while the S&P 500 index is lower by 41.3 percent and the Nasdaq is down by 37.9 percent.

Government bonds fell early Monday, pushing yields higher. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.54 percent from 3.46 percent late Friday.

The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude jumped $1.57 to $67.88.

[Associated Press; By SARA LEPRO]

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