Stock futures advance after Spain makes an official request for EU bank bailout funds and Greece says it will repurchase outstanding debt.
NEW YORK (TheStreet) -- Stock futures were advancing Monday after Greece said it would buy back as much as €10 billion in outstanding debt and Spain made an official request for European Union bank bailout funds from the permanent European Stability Mechanism fund.
Spain is set to receive €37 billion for the recapitalization of four banks.
Investors were also awaiting manufacturing and construction data out of the U.S. and continued to keep an eye on the "fiscal cliff" talks.
Futures for the Dow Jones Industrial Average were up 50 points, or 50.42 points above fair value, at 13,058. Futures for the S&P 500 were up 5.80 points, or 5.92 points above fair value, at 1420. Futures for the Nasdaq were rising 16.75 points, or 17.02 points above fair value, at 2693.
"Futures reached new highs as the emailed statement from the Economy Ministry hit the wires," said Andrew Wilkinson, chief economic strategist at Miller Tabak. "The market has settled somewhat as speculators realize that this is not the same as an official request for state-wide aid. Such a request is now unlikely before 2013 given the comfortable state of health for government funding for this year."
"The second driver of risk-asset strength to start the week is the announcement of an official Greek government plan to buy back ... its outstanding debt," said Wilkinson. "The plan is a requirement of the recent IMF and EU agreement to release the next wave of previously agreed financial assistance for the debt-strapped nation, and if successful will help Greece reach the IMF's target for reducing outstanding debt-to-GDP to 120% by 2020."
Another bright spot for the markets Monday was the read on the HSBC Purchasing Managers' Index for China -- a composite indicator designed to give a single-figure snapshot of operating conditions in the manufacturing economy. It came in at 50.5 in November, up from 49.5 in October and signaling a marginal improvement of operating conditions in the Chinese manufacturing sector.
U.S. stocks made up losses late in the day Friday, ending mostly flat, as investors watched signs of gridlock in talks on the so-called fiscal cliff.
Over the weekend, U.S. Treasury Secretary Timothy Geithner indicated that he's certain the Republicans will concede to raising taxes on the rich, while House Speaker John Boehner didn't seem to think so.
"Press coverage on the fiscal cliff abounds, but there has been disappointingly little tangible progress," said Michala Marcussen, head of global economics at Societe Generale. "Should negotiations fail and the cliff come into effect (a scenario that we put a 10% probability on), the impact would be very disruptive for both markets and the real economy. Note, in this tail risk scenario, we see a 90% probability that the cliff would then be dealt with retroactively, keeping the U.S. economy out of recession."
On the U.S. data front, the Institute for Supply Management is expected to have fallen to 51.3 in November from 51.7 in October, according to economists. The report is to be released at 10 a.m. EST.
At the same time, the Census Bureau is forecast to say that construction spending rose 0.5% in October after increasing 0.6% in September.
Also being reported Monday are auto and truck sales data for November and the Markit manufacturing PMI release for the U.S.
The FTSE 100 in London was rising by 0.41% on Monday, while the DAX in Germany was up by 1%.
Japan's Nikkei average finished up 0.13% and Hong Kong's Hang Seng index closed down by 1.19% after China's official manufacturing PMI number came in at a seven-month high but was below expectations.
Gold for February delivery was rising $4.90 at $1,717.60 an ounce at the Comex division of the New York Mercantile Exchange, while January crude oil contracts were down 7 cents at $88.84 a barrel.
The benchmark 10-year Treasury was down 2/32, pushing the yield up to 1.624%. The dollar was off 0.21%, according to the U.S. dollar index.
In corporate news, Delta Air Lines (:DAL) has reached out to Singapore Airlines (:SINGY) about purchasing the Asian carrier's 49% stake in Virgin Atlantic Airways, according to reports.
Delta shares were up 1% in premarket trading Monday.
Bank of America(:BAC) is putting off plans to revamp its lineup of bank accounts, and thereby increase monthly fees for some checking accounts, the Journal reported.
The new fees would be delayed until at least late next year, the newspaper said, citing people familiar with the bank's plans.
Shares were up 0.71%.
Boeing (:BA)and the Society of Professional Engineering Employees in Aerospace union, which represents the company's 23,000 engineers, tentatively agreed to resume labor talks on Tuesday, after their negotiations on a new contract ended abruptly last week, Reuters reported.
Shares were up 0.27%.
Gravel supplier Martin Marietta Materials (:MLM) is likely to explore a friendly offer for rival Vulcan Materials (:VMC) rather than launch another hostile takeover attempt, the Journal reported, citing people familiar with the decision.
Vulcan Materials shares were rising more than 2% in premarket trading.
LDK Solar (:LDK) slashed its full-year revenue outlook to $950 million to $1 billion, from $1.1 billion to $1.5 billion, and forecast lower-than-expected fourth-quarter revenue of $230 million to $290 million amid predictions of a drop in solar cell and panel shipments driven by soft European demand and elevated U.S. import duties.
The company's third-quarter net loss widened to $136.9 million, or $1.08 per American depository share on a big drop in sales to $291.5 million. The company was expected by analysts Monday to report a third-quarter loss of $1.24 per American depositary share on revenue of $246.4 million.
Shares were down more than 3% in premarket trading.
News Corp. (:NWSA) appointed Robert Thomson, the managing editor of the Journal, as the CEO of its new publishing company..
HCA (:HCA) shares were popping more than 3% after the health care services companies announced that it intends to declare and pay a special cash dividend of $2 a share to stockholders and certain option holders on or prior to Dec. 31.
-- Written by Andrea Tse in New York.
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