Stock futures edge higher ahead of opening

[November 17, 2010]  NEW YORK (AP) -- Stocks were set Wednesday to claw back some of the previous day's big losses as Ireland discusses a bailout with the European Union and Britain pledged support to help the struggling country.

Stocks worldwide have been rattled in recent days as investors fear Ireland will become the latest European country to need a bailout. Greece was bailed out in May after it was unable to contain runaway spending. Ireland is now struggling after a collapse in its housing market forced the country to take over three large banks.

Britain, which is not part of the 16-nation bloc that uses the euro, on Wednesday offered to provide additional support to Ireland above and beyond any help it gets from the European Union or International Monetary Fund. That has helped steady markets in Europe where the euro is used. Stocks in Britain were little changed.

British banks would be among the hardest hit by an Irish debt default because they are among the largest investors in Irish bonds.

Investors are concerned that a failure in Ireland could be just another step in a string of bailouts needed to help governments throughout Europe. Traders are also worried about big government debts in Portugal, Spain and Italy.

The euro was slightly higher against the dollar Wednesday, but remains near its lowest level since late September.

Ahead of the opening bell, Dow Jones industrial average futures rose 22, or 0.2 percent, to 11,006. Standard & Poor's 500 index futures rose 3.50, or 0.3 percent, to 1,178.20, while Nasdaq 100 index futures rose 6.75, or 0.3 percent, to 2,097.50.

Britain's FTSE 100 fell less than 0.1 percent after it pledged to help Ireland. Germany's DAX gained 0.4 percent, while France's CAC-40 rose 0.6 percent.

Traders have driven stocks lower in recent days as they focused on intentional events at the expense of the latest earnings and economic reports domestically. Wednesday's reports on inflation at the retail level and housing starts could draw some attention back to the health of the U.S. economy.

Economists polled by Thomson Reuters predict the consumer price index rose 0.3 percent last month, up from 0.1 percent in September. Excluding volatile food and energy costs, prices likely rose 0.1 percent in October.

Inflation has not been a problem in recent months, which recently led the Federal Reserve to launch a second round of bond purchases. The Fed is trying to drive interest rates lower, which is supposed to increase economic activity and push inflation to more historical levels.

Bond prices were mixed Wednesday. The yield on the 10-year Treasury note, which moves opposite its price, rose to 2.87 percent from 2.85 percent late Tuesday. Its yield is often used as a benchmark for interest rates on mortgages and other consumer and corporate loans.

Housing starts likely fell slightly as the housing market remains mired in a big slump since the a government home buyer tax credit expired earlier in the year. Building permits, which are considered a good gauge of future activity, likely rose 6 percent last month.

[Associated Press; By STEPHEN BERNARD]

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