LONDON (MarketWatch) – U.S. stock futures pointed to a stronger start Monday, tracking gains made overseas, as analysts saw little resistance to a continued flow of cheap money that’s propelled markets 60% from the lows of the year.
S&P 500 futures rose 11 points to 1,077.20 and Nasdaq 100 futures improved 17 points to 1,746.70. Futures on the Dow Jones Industrial Average rose 93 points.
U.S. stocks rose on Friday and on the week as investors took away from a report showing 190,000 nonfarm jobs lost and a 10.2% unemployment rate in October that the economy is continuing to recover but that the Federal Reserve isn’t about to reverse ultra-low interest rates anytime soon.
“With the market gradually becoming more comfortable that the Fed wouldn’t be changing their language and then actually confirming this mid-week, it was no surprise to see the U.S. market rise every day last week,” said Jim Reid, a strategist at Deutsche Bank. “Even those of us who think that there are a lot of risks ahead in 2010 think that November and December are likely to be decent months for equities and risk in general.”
And most asset class moves on Monday were consistent with increasing risk: the dollar dropped against all but the Japanese yen, oil futures climbed, and bonds fell.
Over the weekend, a meeting of the Group of 20 finance ministers didn’t mention currencies, which “has given fresh ammunition to the carry trade and the dollar funding of pro-risk strategies,” according to Ken Broux, an economist at Lloyds TSB Corporate Markets.
Oil also was affected by concerns over Hurricane Ida, which has weakened but is still heading toward the northern Gulf Coast.
Only gold futures, traditionally a safe-haven asset, bucked the trend, hitting a new record of $1,109.90 an ounce.
Warren Buffett’s Berkshire Hathaway (BRKA)(BRKB) late Friday said its profit more than doubled on a rebound in the value of its holdings and a lack of hurricanes during the quarter.
One of Berkshire’s holdings, Kraft Foods (KFT), will be in the spotlight as the U.S. food giant is expected to launch a formal offer for Britain’s Cadbury (CBY) ahead of a deadline.
French insurer Axa (AXA) announced it was selling 2 billion euros of discounted shares to fund acquisitions as its partly held subsidiary, Axa Asia Pacific (AXAPY), rejected a $10 billion joint bid between Axa and AMP (AMLTY).
Northrop Grumman (NOC) said it’s selling its TASC consulting business to two private-equity firms for $1.65 billion.
The health sector will continue to be in the spotlight as the House of Representatives approved reform legislation by a narrow margin.
Asian stocks ended higher on Monday, with the Nikkei 225 up 0.2% in Tokyo and the Hang Seng climbing 1.7% in Hong Kong. Moody’s upgraded its rating on China and Hong Kong to positive from stable.
Helped by gains from miners and insurers, the pan-European Dow Jones Stoxx 600 rose 1.6%.
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