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Wall Street heads to higher on optimism about credit crisis

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[May 01, 2008]  NEW YORK (AP) -- Wall Street headed toward a higher open Thursday amid growing optimism that the credit crisis that pummeled global markets might be nearing an end.

Investors, one day after the Federal Reserve cut interest rates by a quarter point, are more confident about the financial system's recovery. Fresh comments from Treasury Secretary Henry Paulson and the Bank of England only helped to bolster that point.

The BOE issued a report Thursday that said credit markets will gradually recover in coming months amid an eventual realization that risks from the subprime crisis have been exaggerated. Meanwhile, Paulson said in an interview Wednesday with business news program Nightly Business Report that the U.S. is "closer to the end of this period of turmoil."

The latest comments about the credit crisis might help assuage investors' fears about the economy, and help offset negative manufacturing data expected early in the session. The Institute for Supply Management, a trade group of purchasing executives, is forecast to report manufacturing activity declined in April for the third consecutive month.

The report will be issued at 10 a.m. EDT. Investors will also get data on March personal income and spending data, as well as weekly jobless claims and March construction spending.

Dow Jones industrial average futures rose 37, or 0.31 percent, to 12,844. Standard & Poor's 500 index futures were up 2.50, or 0.18 percent, at 1,388.60, while Nasdaq 100 index futures rose 4.25, or 0.22 percent, to 1,927.50.

Bond prices fell in overnight trading. The yield on the benchmark 10-year Treasury note, which moves opposite its price, edged up to 3.75 percent from 3.73 percent late Wednesday.

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Light, sweet crude fell 26 cents to $113.20 a barrel in electronic trading on the New York Mercantile Exchange.

In corporate news, Starbucks Corp. reported fiscal second-quarter profit sank 28 percent as U.S. consumers responded to rising food and gas prices. The coffee purveyor slashed 30 additional store openings from its already-scaled-back plan for 2008 and said it will open fewer than 400 stores per year in 2009 through 2011.

Wall Street is also waiting for reports from Exxon Mobil Corp. and Sun Microsystems Inc.

Overseas, Japan's Nikkei stock average fell 0.60 percent. In morning trading, Britain's FTSE 100 rose 0.06 percent, Germany's DAX index added 0.92 percent, and France's CAC-40 rose 0.39 percent.


On the Net:

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

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

[Associated Press; By JOE BEL BRUNO]

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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