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Wall Street looks to extend big gains

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[March 11, 2009]  NEW YORK (AP) -- Wall Street appeared ready Wednesday to extend its big rally into a second day.

DonutsStock index futures pointed sharply higher after markets around the world followed the lead of U.S. investors who bought stocks furiously Tuesday on news that Citigroup Inc. was operating at a profit.

However, analysts were still very cautious, noting that it's common for the stock market to blip up after a prolonged period of selling. They also noted that investors are still well aware of the many problems facing the economy.

There is little economic and corporate news expected Wednesday. Investors are likely to keep a close watch on financial stocks, especially as they await more details on the government's plan for dealing with banks' toxic assets. Treasury Secretary Timothy Geithner said Tuesday that the Obama administration will unveil the plan within the next couple of weeks.

During an interview on "The Charlie Rose Show," Geithner said the plan the administration has put together will provide financing to private investors who are willing to buy banks' bad assets. He predicted the plan will succeed but will take time to work.

Financial stocks led Tuesday's rally, which saw the Dow Jones industrials surge nearly 380 points. Word of Citigroup's improved performance was a welcome reprieve to the flood of bad news that has slammed bank stocks and the broader market for months. And it provided investors with a boost of optimism that the first quarter might not be as bad as expected.

But Tuesday's rally was also fed by short covering, which occurs when investors need to buy stock to replace shares that were borrowed and then sold on expectations of a market decline.

Ahead of the market's open, Dow Jones industrial average futures rose 93, or 1.4 percent, to 6,980. Standard & Poor's 500 index futures added 7.70, or 1.1 percent, to 723.70, while Nasdaq 100 index futures rose 9.50, or 0.9 percent, to 1,115.50.

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Bond prices were mixed early Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged from late Tuesday at 3 percent. The yield on the three-month T-bill, considered one of the safest investments, slipped to 0.23 percent from 0.24 percent late Tuesday.

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

Light, sweet crude fell 19 cents to $45.52 a barrel in electronic premarket trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average jumped 4.55 percent and Hong Kong's Hang Seng rose 2.02 percent. In late morning trading, Britain's FTSE 100 was up 0.47 percent, Germany's DAX index was up 1.03 percent, and France's CAC-40 was up 1.00 percent.


On the Net:

New York Stock Exchange: http://www.nyse.com/

Nasdaq Stock Market: http://www.nasdaq.com/

[Associated Press; By SARA LEPRO]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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