Wall Street to open higher on Italy relief

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(Reuters) – Wall Street was set to open higher on Wednesday, buoyed by a rebound in European markets after Italy indicated that it was open to reducing budget deficits and debt in the coming years.

FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 21, 2018. REUTERS/Brendan McDermid

Concerns over Italy’s budget deficits and high debt levels have pressured global stock markets since the country’s ruling coalition last week tripled the previous government’s budget deficit target.

“Today, so far, has been better-than-expected performance out of Europe and that’s got futures up,” said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee, Wisconsin.

Antonelli said while Italy was not a gigantic catalyst for the market, but a loss out of Europe has been setting the tone for the U.S. markets.

U.S. bank stocks rose, with Citigroup (C.N), JPMorgan Chase (JPM.N), Bank of America (BAC.N) up between 0.6 percent and 0.8 percent, mirroring a recovery in their Italian peers.

Among top gainers on the S&P 500 .SPX stocks trading premarket was General Motors (GM.N), which jumped 5.3 percent after Honda Motor (7267.T) said it would invest $2 billion over 12 years in the U.S. carmaker’s Cruise self-driving unit.

Shares of J.C. Penney (JCP.N) surged 10.9 percent after the company named retail veteran Jill Soltau as its new chief executive.

At 8:40 a.m. ET, Dow e-minis 1YMc1 were up 99 points, or 0.37 percent. S&P 500 e-minis ESc1 were up 10.5 points, or 0.36 percent and Nasdaq 100 e-minis NQc1 were up 31.75 points, or 0.41 percent.

Lennar (LEN.N) was up 0.5 percent, paring some early gains, after the U.S. homebuilder reported a higher-than-expected quarterly profit, benefiting from a robust housing market.

Other homebuilders also rose. D.R. Horton (DHI.N), PulteGroup (PHM.N), and Toll Brothers (TOL.N) gained between 1.2 percent and 1.8 percent in light volumes.

Michael Kors (KORS.N) rose 2.6 percent after Citi upgraded the company’s shares, citing a potential upside from its recent purchase of Italian fashion house Versace.

Intel (INTC.O) looked set for a second straight day of gains, up 1.3 percent. The chipmaker closed 3.6 percent higher on Tuesday and was among the biggest drivers that helped the bluechip Dow Jones Industrial Average .DJI seal a record closing high.

A number of Federal Reserve officials are scheduled to speak on topics ranging from the outlook of the U.S. economy to the labor market on Wednesday.

ADP National Employment Report showed U.S. economy added 230,000 private sector jobs in September, highest since February and above the 185,000 increase expected by Reuters consensus forecast.

The ISM data due at 10:00 a.m. ET is expected to show its non-manufacturing activity index fell 0.5 point to 58.0 in September.

Reporting by Medha Singh in Bengaluru; Editing by Sriraj Kalluvila

Our Standards:The Thomson Reuters Trust Principles.

2018-10-03 13:14:06

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