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US Stock Futures Rise on Speculation Greece's Papandreou Will Step Down

Thursday, 03 Nov 2011 09:05 AM

U.S. stock futures rose, indicating the Standard & Poor’s 500 Index will rally a second day, on speculation Greek Prime Minister George Papandreou will step down and the country’s new leadership will accept a bailout.

Qualcomm Inc. jumped 9.8 percent as the maker of mobile- phone chips forecast higher sales than analysts had predicted. Kraft Foods Inc., the food company planning to split in two next year, added 2.1 percent after raising its earnings forecast. Estee Lauder Cos. gained 9.1 percent after the cosmetics maker raised its dividend and announced a 2-for-1 split.

S&P 500 futures expiring in December added 0.7 percent to 1,242.7 at 8:37 a.m. in New York. Dow Jones Industrial Average futures rose 86 points, or 0.7 percent, to 11,854 today.

"The possibility of Papandreou stepping down would potentially remove the uncertainty about a referendum, but raises questions about overall stability in Greece," Walter Todd, who helps manage about $950 million at Greenwood Capital in Greenwood, South Carolina, said in a telephone interview.

Equities rose yesterday as the Federal Reserve said it is prepared to take action if needed to safeguard the recovery. Stocks fell earlier this week as Papandreou announced on Oct. 31 a parliamentary confidence vote and his desire to hold a referendum on the rescue pact.

The BBC reported Papandreou will step down today and propose a coalition government headed by former European Central Bank vice-president Lucas Papademos, without saying how it got the information.

Euro Area Splintering

European leaders for the first time raised the prospect of the euro area splintering, forcing debt-stricken Greece to decide whether it’s in or out when it holds a referendum on a bailout package next month. German and French leaders holding emergency talks on the eve of a Group of 20 summit today in Cannes, France, withheld 8 billion euros ($11 billion) of assistance.

“Europe is going to be front and center for a long time,” Tom Wirth, who helps manage $1.5 billion as senior investment officer for Chemung Canal Trust Co., in Elmira, New York, said in a telephone interview. “Europe is definitely going to have slower economic growth. The question is -- how does that impact our market? Corporate earnings have been strong, economic reports have been decent.”

A report today showed fewer Americans filed applications for unemployment benefits last week, signaling limited progress in the labor market. A separate report today may show that service industries in the U.S. grew at a faster pace in October, indicating the biggest part of the economy is holding up, economists said.

Qualcomm Jumps

Qualcomm jumped 9.8 percent to $57.31. The company, which gets most of its profit from licenses on technology used in so- called 3G phones, is benefiting as more consumers switch to the technology -- especially in developing countries. Widening use of smartphones fuels growth in royalty revenue and sales of cellular radio chips and processors.

Kraft added 2.1 percent to $35.37. Chief Executive Officer Irene Rosenfeld plans to spin off the North American grocery business by the end of next year to focus on selling snack foods in emerging markets. Food companies such as Kraft, Sara Lee Corp. and General Mills Inc. have raised prices on many products this year to make up for higher costs for ingredients such as corn, coffee and sugar.

Estee Lauder jumped 9.1 percent to $110. The maker of Clinique and Bobbi Brown makeup lines announced plans for a 2- for-1 split. The New York-based company also said it will increase its annual dividend by 40 percent to $1.05 a share.


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U.S. stock futures rose, indicating the Standard Poor s 500 Index will rally a second day, on speculation Greek Prime Minister George Papandreou will step down and the country s new leadership will accept a bailout.Qualcomm Inc. jumped 9.8 percent as the maker of mobile-...
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2011-05-03
Thursday, 03 Nov 2011 09:05 AM
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