Stock Futures Rise Amid Hopes for China Stimulus

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NEW YORK (TheStreet) -- Stock futures were pointing to a rebound on Monday as leaders at the G8 summit in Camp David voiced support for Greece's continued membership in the eurozone and amid Chinese plans to stimulate growth in the second-largest global economy.

Futures for the Dow Jones Industrial Average were rising 58 points, 43.6 points above fair value, at 12,393 and futures for the S&P 500 were up 6.3 points, or 3.8 points above fair value, at 1297, pointing at a bounce for the index from a fourth-month low. Futures for the Nasdaq were up 14 points, or 5.1 points above fair value, at 2482.

U.S. stocks declined Friday, wrapping up the worst week for the markets in 2012, as Facebook was only able to muster a slight gain in its public debut and continued eurozone worries weighed on the broad market.

But stocks looked to be on their way to receiving a lift after Chinese premier Wen Jiabao said over the weekend that he wants to see more measures taken to stimulate economic growth in China.

Without providing details of the measures he had in mind, Wen said "the relationship between maintaining growth, adjusting economic structures and managing inflation, must be properly handled," according to the Xinhua News Agency. "We should continue to implement a proactive fiscal policy and a prudent monetary policy while giving more priority to maintaining growth."

China last week carried out some small measures, with expectations of more down the line, to stimulate domestic consumption following a handful of lackluster economic data including weak retail sales and tepid import growth. The steps included subsidies for the buying of energy efficient goods in the form of, for example, washing machines, light bulbs, and green cars.

"At this junction, a bigger priority means the biggest priority, which is a clear signal of more policy easing to come," noted economists at Societe Generale of Wen's remarks.

Over the weekend in Camp David, Md., G8 summit leaders expressed to German Chancellor Angela Merkel their desire to see more effort put into bolstering eurozone economic growth, though their urging didn't result in any firm commitments nor specify whether countries with the ability to ramp up growth should have to do this.

Leaders from the top economies said in a statement that their goal is to "promote growth and jobs." This was a departure away from the view in favor of eurozone-wide austerity measures targeting burgeoning budget deficits.

"The right measures are not the same for each of us," they added.

Towards the end of the summit, President Barack Obama added, "We agreed upon the importance of a strong and cohesive eurozone and affirmed our interest in Greece staying in the eurozone while respecting its commitments."

London's FTSE was up 0.6% and the DAX in Germany was rising 0.8%.

"The current uncertainty regarding the economic outlook stemming from the ongoing European crisis will likely forestall any additional easing at the June FOMC meeting," UBS economist said in an investor note. "The available supply of securities to purchase is not, we believe, sufficient to allow for both a QE3 and any subsequently-required program in the near term. However, this constraint will ease over time as Treasury issuance continues."

The U.S. economic calendar on Monday is clear.

The Hang Seng Index in Hong Kong finished 0.2% lower and Japan's Nikkei average closed up 0.3%.

The benchmark 10-year Treasury was falling 11/32, lifting the yield to 1.76%. The greenback was falling 0.2%, according to the dollar index.

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The July crude oil contract was up 37 cents at $92.17 a barrel. June gold futures were down $1.20 to $1,590.70 an ounce.


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In corporate news, Facebook shares didn't get that massive pop many investors had hoped for on Friday, closing fractionally higher in the social networker's debut as a public company. After the IPO was priced at $38 a share late on Thursday, the stock opened at $42.05 at roughly 11:30 a.m. EDT on Friday. The shares briefly jumped to a high of $45 before running down toward their pricing level. The stock closed at $38.23.

The CEO of Nasdaq on Sunday acknowledged technology problems related to Facebook's listing on Friday, The Wall Street Journal reported. Nasdaq came under fire after trading in Facebook shares was delayed by 30 minutes on Friday.

Shares of Facebook fell 4% to $36.65, below its $38 IPO price in premarket trading.

Barclays said Monday that it is planning to sell its $6.1 billion stake in BlackRock . Barclays holds a 19.6% stake in the asset-management company.

BlackRock shares were down 0.82%.

Yahoo! reached a deal to sell up to half of its stake in Alibaba back to the Chinese e-commerce company for about $7.1 billion.

The two companies announced the deal late Sunday.

If Alibaba purchases half of the stake for $7.1 billion, it will pay at least $6.3 billion in cash and up to $800 million worth of newly issued Alibaba preferred stock, the companies said. The deal sets up a framework for Yahoo! to eventually monetize all of its Alibaba stake.

Yahoo! shares rose 6.68%.

Lowe's , the home-improvement retailer, reported first-quarter earnings Monday of $527 million, or 43 cents a share, up from year-earlier earnings of $461 million, or 34 cents. Lowe's first-quarter sales were $13.2 billion, up from $12.2 billion the prior year.

Lowe's was expected by analysts to post a first-quarter profit of 42 cents a share on sales of almost $13 billion. The company said it expects same-store sales to rise between 1% and 3% in fiscal 2012 and to open 10 stores during the year.

The largest operator of kidney dialysis centers in the U.S., DaVita , said Monday that it has agreed to buy HealthCare Partners, which operates medical groups several states in the U.S., for $4.4 billion.

-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here: Andrea Tse.

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