US stock index futures rose on Friday as major world central banks prepared for possible co-ordinated action if the Greek election this weekend causes turmoil in financial markets. Officials from the Group of 20 leading industrialised nations told Reuters that central banks of major economies would take steps to stabilise markets and prevent a credit squeeze, if necessary. European shares climbed 1.1 percent.
Markets have been highly volatile in a thinly traded week, with the S&P 500 moving more than 1 percent for three of the past four days. Investors fear Sunday's vote in Greece could set the nation on a path to an exit from the euro zone. "A co-ordinated effort to stop a run on the bank is good news, but there's still a lot of uncertainty over the region, so it's possible the slight gains we're seeing now could run out of steam," said Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh, who called the rise in futures a "sugar high."
Hints of a safety net by central banks invigorated Wall Street in late trading Thursday, sparking an afternoon rally that erased the S&P's losses for the week. The benchmark index is now up 0.3 percent on the week. S&P 500 futures rose 1.8 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. Dow Jones industrial average futures added 25 points and Nasdaq 100 futures rose 5.75 points.
Investors will look ahead to the Thomson Reuters/University of Michigan preliminary June reading on the overall index on consumer sentiment, which is seen falling to 77.5 in the month from 79.3 in May. Other data include US May industrial output, expected to rise 0.1 percent from April. "The data is real economic input into what's happening in the US, and smart investors will pay attention even if they can't really trade on it right now because of Europe," Forrest said.
Recent economic indicators, including Thursday's unexpected rise in jobless claims, have pointed to sluggish growth in the US economy. However, US equities have largely tracked European developments in recent months, and shrugged off weak domestic data on occasion. Some investors think the lacklustre US data increases the chances that the Federal Reserve will signal more easy money to counter slowing growth when it releases its policy statement next Wednesday at the close of a two-day meeting.
The Wall Street Journal reported late Thursday Microsoft Corp would buy business software company Yammer Inc for $1.2 billion, citing a person familiar with the matter. China granted conditional approval to US conglomerate United Technologies Corp's $16.5 billion take-over of aircraft parts maker Goodrich Corp, saying Goodrich needed to divest or sell parts of some businesses. Diamond Foods Inc late Thursday said it had received a letter from Nasdaq saying it had missed the deadline for filing its already-delayed quarterly report, a fact which could lead to the company's delisting from the stock exchange.
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