Futures gain with Italy budget vote on tap
Stock index futures advanced on Tuesday as Italian lawmakers readied for a crucial vote on public finances that marks the latest turn in the euro zone debt crisis.
Investors were encouraged after European Central Bank policymaker Juergen Stark said he sees the crisis over in the next year or so as politicians now realize the need for painful action.
Italian Prime Minister Silvio Berlusconi faced a crucial vote on public finances in parliament that could sink his center-right coalition if enough party rebels desert him. Berlusconi's closest coalition ally told him to resign in what could be a mortal blow to the prime minister.
That is what we are going to find out. Are these countries too big to save? It all goes back to what is going to happen to the banks balance sheets if sovereign debt is going to have to take a haircut, said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
In Athens, wrangling continued as politicians tried to form an interim government to save Greece from bankruptcy by enacting a second international bailout plan.
Italian 10-year borrowing costs touched a new record of 6.71 percent on Tuesday, raising the risk that Rome's massive debt -- the second highest in Europe at 120 percent of gross domestic product -- could spiral out of control.
S&P 500 futures rose 9 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures gained 91 points while Nasdaq 100 futures climbed 22.75 points.
European shares rose 1.5 percent, bouncing back from two days of losses, as upbeat corporate news from the likes of telecommunications heavyweight Vodafone Plc
Asian shares wiped earlier gains and fell, weighed by concerns about Europe's crisis.
With little on the U.S. economic calendar this week and earnings season near an end, the debt crisis will be at the front of investors' minds.
Hewlett-Packard Co
An experimental antidepressant from AstraZeneca Plc
Targacept shares tumbled nearly 60 percent to $7.69 in premarket trading, and U.S.-listed AstraZeneca
Dynegy Holdings, a unit of energy producer Dynegy Inc
(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)
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