Stock futures point higher after week's pullback

[May 22, 2009]  NEW YORK (AP) -- Stocks are pointing higher Friday after a slide this week and ahead of a long holiday weekend.

Stock futures rose ahead of what was expected to be a quiet trading day. Light trading volume ahead of Memorial Day could fan swings in the market, however.

Investors found some room for optimism after banks reduced borrowing from the Federal Reserve's emergency loan program over the past week. Investment firms didn't borrow at all during the week -- the first time that's happened since early September. That was a hopeful sign that some credit stresses are letting up.

The Fed on Thursday said commercial banks averaged $38.2 billion in daily borrowing over the week that ended Wednesday. That was down from $39.9 billion in the previous week.

The identities of the financial institutions are not released. They pay just 0.50 percent in interest for the emergency loans.

Stock futures rose after stocks tumbled this week on fears about how long the economy migth take to recover and unease over a credit rating agency about the British government's debt load. That spread unease about the U.S. government's borrowing.

Dow Jones industrial average futures rose 45, or 0.5 percent, to 8,340. Standard & Poor's 500 index futures rose 4.90, or 0.6 percent, to 893.60, while Nasdaq 100 index futures rose 9.50, or 0.7 percent, to 1,377.00.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.36 percent from 3.37 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.18 percent from 0.17 percent.

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

Light, sweet crude fell 54 cents to $61.59 per barrel on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average fell 0.4 percent. In afternoon trading, Britain's FTSE 100 rose 0.7 percent, Germany's DAX index rose 1.1 percent, and France's CAC-40 added 1.1 percent.

[Associated Press; By TIM PARADIS]

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