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U.S. stock-index futures climb on holiday sales, Europe optimism

Posted 11/28/11

NEW YORK - U.S. stock futures rose, signaling the Standard & Poor’s 500 Index will snap a seven-day decline, after Thanksgiving retail sales climbed to a record and euro-area leaders were said to boost efforts to end the debt crisis.

AT&T Inc. added 1.7 percent after the company was said to prepare an antitrust remedy proposal over its acquisition of Deutsche Telekom AG’s U.S. unit. Alcoa Inc. rallied 3.8 percent as metal prices rose. JPMorgan Chase & Co. advanced 3.9 percent, tracking European banking shares. Amazon.com Inc. jumped 3.2 percent after selling four times more Kindle products on Black Friday as it did last year.

S&P 500 futures expiring in December advanced 2.8 percent to 1,185.80 at 8:27 a.m. in New York. The benchmark equity index has fallen 7.9 percent since Nov. 15, including the worst Thanksgiving-week decline since 1932. Futures on the Dow Jones Industrial Average gained 251 points, or 2.2 percent, to 11,438.

“It would be a relief for money managers if we can just move Europe from a negative to a neutral impact on the market,” Dan Veru, chief investment officer at Fort Lee, N.J.-based Palisade Capital Management LLC, which manages $3.4 billion, said in a telephone interview. “There’s an underpinning of growth in the U.S. and it’s picking up steam.”

U.S. retail sales during the Thanksgiving weekend increased 16 percent to $52.4 billion, the National Retail Federation said, citing a survey conducted by BIGresearch. The average shopper spent $398.62, up from $365.34 a year earlier.

Consumer spending, which accounts for about 70 percent of the economy, grew at a 2.3 percent annual rate in the third quarter, the fastest pace in 2011, the Commerce Department said Nov. 22.

Home Sales

A report at 10 a.m. in Washington Monday may show purchases of new U.S. houses were little changed in October. Sales came in at a 313,000 annual pace last month, the same as in September, according to the median estimate of 57 economists surveyed by Bloomberg News.

German newspaper Welt am Sonntag reported German Chancellor Angela Merkel and French President Nicolas Sarkozy are discussing an agreement under which member states will commit to tighter budget discipline without waiting for treaty changes. The newspaper did not say where it got the information.

German Finance Minister Wolfgang Schaeuble called for fast- track treaty changes to tighten budget discipline among member states of the euro area. He spoke in an interview with ARD television in Berlin yesterday.

Italian Prime Minister Mario Monti will propose more austerity measures this week to balance the country’s budget by 2013, the Wall Street Journal reported yesterday.

Bailout Fund’s Plans

The European Financial Stability Facility may insure the bonds of debt-stricken countries with guarantees of 20 percent to 30 percent of each issue, depending on market circumstances, according to EFSF guidelines that finance ministers will discuss this week.

Euro-area finance ministers meet in Brussels on Nov. 29 as governments bid to regain the confidence of financial markets.

The increased severity of the debt crisis is threatening the credit standing of the region’s countries, Moody’s Investors Service said in a report today. More than $1.2 trillion has been erased from U.S. stocks since Nov. 15 on mounting concern that the crisis will spread and American policy makers failed to reach agreement on reducing the federal budget.

AT&T Remedy Proposal

AT&T climbed 1.7 percent to $27.87. The company, which faces regulatory opposition to its takeover of T-Mobile USA, is preparing its biggest antitrust remedy proposal to salvage the deal, according to a person familiar with the plan. AT&T may offer to divest a significantly larger portion of assets than it had planned. That could be as much as 40 percent of T-Mobile USA’s assets, the person said.

Alcoa, the largest U.S. aluminum producer, gained 3.8 percent to $9.29 as copper, lead, nickel and zinc advanced on the London Metal Exchange. Freeport-McMoRan Copper & Gold Inc., the world’s biggest publicly traded copper producer, surged 5.4 percent to $35.66. Molycorp Inc. climbed 5.6 percent to $28.50.

JPMorgan jumped 3.9 percent to $29.60, while Bank of America Corp. advanced 4.4 percent to $5.40. Goldman Sachs Group Inc. surged 2.8 percent to $91.25. A gauge of European banking shares climbed 5 percent, among the best performances in the benchmark Stoxx Europe 600 Index.

Amazon.com Inc. rose 3.2 percent to $188.20. The world’s largest Internet retailer said it sold four times more Kindle products on Black Friday compared to last year.

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