By Saumya Vaishampayan
U.S. stock futures rose Monday, rebounding from steep declines
on Friday, amid news of more stimulus from China and upbeat
corporate news.
S&P 500 futures advanced 10 points, or 0.5%, to 2085. E-mini
Dow futures gained 90 points, or 0.5%, to 17860, and e-mini
Nasdaq-100 futures rose 14 points, or 0.3%, to 4363. Changes in
stock futures don't always accurately predict moves in the stock
market after the opening bell.
A move from China's central bank to free up about $200 billion
for banks to lend attracted attention across the globe, part of
China's efforts to stimulate growth. The People's Bank of China on
Sunday announced it would cut the reserve requirement by one
percentage point, its second reduction in less than a quarter and
the biggest since December 2008. The decision came just days after
fresh evidence of China's slowing economy. Hong Kong's Hang Seng
Index posted its biggest one-day decline this year, while the
Shanghai Composite fell 1.6%.
European stocks added to the positive tone. Germany's DAX
advanced 1.4% and France's CAC 40 added 0.4%. The Stoxx Europe 600
rose 0.7%, after posting its worst daily loss in three months on
Friday.
In corporate news, Morgan Stanley's first-quarter profit and
revenue rose, beating Wall Street estimates, as the bank benefited
from a stronger environment for deals and trading. Shares rose 2%
premarket.
Merck & Co. shares rose 1.3% in premarket trading. A study
showed Merck's new cancer drug Keytruda improved the survival odds
of patients with the skin cancer melanoma compared with
Bristol-Myers Squibb Co.'s Yervoy. Merck also said it has filed for
U.S. regulatory approval to market its drug as a treatment for lung
cancer.
While the Chinese move helped buoy markets in Europe and the
U.S. Monday, it isn't all good news for investors, said Peter
Cardillo, chief market economist at broker-dealer Rockwell Global
Capital.
"It means that the world's economy is subject to even slower
growth, which means the potential for lower future earnings," he
said. Mr. Cardillo said he's expecting a correction in the shorter
term, but remains positive on stocks for the year.
Stocks fell Friday, with the Dow slipping 1.5% to 17826.30. The
S&P 500 fell 1.1%, to 2081.18, and the Nasdaq Composite lost
1.5% to 4931.81.
In commodity markets, gold futures slipped 0.4% to $1198.50 an
ounce. Crude-oil futures fell 1.2% to $56.61 a barrel.
The yield on the 10-year note rose to 1.872% from 1.849% on
Friday. Yields rise as prices fall.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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