rise on hopes for ECB action, merger activity
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[August 25, 2014] By
NEW YORK (Reuters) - U.S.
stock index futures were modestly higher on Monday,
indicating the S&P 500 would open near record levels,
amid corporate merger activity and as hopes grew for
more monetary stimulus in European markets.
U.S. investors took cues from Europe, where an index of major
shares rose 0.7 percent after European Central Bank President Mario Draghi said Friday the ECB was prepared to respond with available
tools if inflation dropped further. Investors took this to mean the
ECB could start an asset purchase program or adopt other stimulus
measures in the coming months, which would boost assets like stocks
Draghi spoke at a global central banking conference in Jackson Hole,
Wyoming. U.S. Federal Reserve Chair Janet Yellen spoke, too, but
didn't provide hints on the timing of any interest rate hikes,
contributing to a modest equity market decline on Friday.
InterMune Inc jumped 37 percent to $73.48 in premarket trading after
Roche Holding AG agreed to buy the biotechnology company for $8.3
billion in cash. The deal is the latest vote of confidence in the
biotech sector, which many - including Yellen - worry is overvalued.
S&P 500 e-mini futures rose 6 points and were above fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration on the contract,
indicating a higher open. Dow Jones industrial average e-mini
futures added 44 points and Nasdaq 100 e-mini futures rose 15.5
U.S. stocks have been strong of late. Major indexes closed a third
week of gains Friday, with the Dow and S&P enjoying their best weeks
since April. The S&P hit an intraday and closing high last week, and
market participants are looking for the benchmark index to pierce
the 2,000 level for the first time.
Burger King is in talks to acquire Canadian coffee and doughnut
chain Tim Hortons Inc, in a deal that would be structured as a
so-called tax inversion transaction to move Burger King's domicile
to Canada, which has lower overall corporate taxes.
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The Wall Street Journal reported that activist Investor Engine
Capital LP wants Ann Inc to sell itself, believing the company
could fetch around $2.5 billion.
A cyber attack took down Sony Corp's PlayStation Network over
the weekend, though it was back online on Monday.
Investors continued to eye tensions between Ukraine and Russia, with
Ukraine's military saying its government force had engaged with a
separatist armoured column near the southeastern town of Novoazovsk,
not far from the Russian border.
Traders are looking ahead to a read on July new home sales, as well
as August data on the services sector from financial data firm
Markit. The Markit data will be released at 9:45 a.m. EDT (1345
GMT), and the housing data at 10:00 a.m.
(Editing by Bernadette Baum)
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