Stock Futures Up As Spain Works On Reforms; Apple Eyed
NEW YORK (Reuters) - Stock index futures advanced on Friday as Spain worked on reform measures in anticipation of a bailout package and as Apple debuted its latest iPhone worldwide.
Spain is considering freezing pensions and speeding up a planned rise in the retirement age as it races to cut spending and meet conditions of an expected international sovereign aid package, Sources with knowledge of the matter said.
After gaining about 6 percent since the start of August, largely on expectations for new economic stimulus measures by world central banks, the S&P 500 <.spx> has seen muted action this week. The index has been unable to muster a daily move of more than 0.4 percent in either direction in the wake of the U.S. Federal Reserve's latest quantitative easing plan.
"We are getting to some sort of a bailout for Spain, that helps calm the market - a higher euro favors a lower dollar, a lower dollar with the support of the central banks obviously fuels equity purchases," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
Volatility towards the close Friday may be increased due to 'quadruple witching' - the quarterly settlement and expiration of four different types of September equity futures and options contracts. Expiration can lead to greater volume and volatility as players adjust or exercise their derivative positions.
"The market will probably see some volatility in the sense of the swelling of volume but basically in a trading range, most likely positive," Cardillo said.
Minneapolis Fed President Narayana Kocherlakota, who has long argued that pushing too hard to get Americans back to work risks inflation, reversed course and suggested the Fed should keep rates low until the jobless rate drops to 5.5 percent.
S&P 500 futures rose 3.7 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the dricontract. Dow Jones industrial average futures gained 41 points, and Nasdaq 100 futures added 8.75 points.
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European shares pared earlier gains and briefly dipped into the red in choppy trade, with futures and options expiries unleashing volatility on the market. The FTSEurofirst 300 <.fteu3> was up 0.3 percent. <.eu/>
Asian shares rose as investors were comforted by recent central bank steps to support the global economy in the face of weak data.
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