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US STOCKS-Futures extend gains after ECB rate cut

Source : REUTERS
Last Updated: Thu, May 02, 2013 13:30 hrs

* ECB cuts rates to support flagging euro zone economy

* China, India PMIs show factory sector growth stumbling

* International trade, jobless claims data on tap

* Futures: S&P up 6.6 pts, Dow up 59 pts, Nasdaq up 14 pts

By Angela Moon

NEW YORK, May 2 (Reuters) - U.S. stock index futures rose on Thursday, adding to earlier gains, after the European Central Bank cut interest rates for the first time in 10 months to support a flagging euro zone economy.

"This is an assertive move by the ECB to jump start recovery in the euro zone," said Rick Meckler, president of hedge fund LibertyView Capital Management LLC in Jersey City, New Jersey.

"If someone besides the Fed is pushing for economic growth, it's positive for the (equities) market."

The ECB lowered its main interest rate by a quarter point to a new record low of 0.50 percent, in response to a drop in inflation well below its target level, and amid rising unemployment.

The cut was widely expected, after ECB President Mario Draghi said last month the bank stood ready to act. He will hold a news conference at 8:30 a.m. EDT (1230 GMT) to explain the decision.

S&P 500 futures added 6.6 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 59 points while Nasdaq 100 futures added 14 points.

General Motors reported a stronger-than-expected quarterly profit as its North American business improved and its loss in Europe was smaller than Wall Street estimated. The stock was up 4.3 percent in premarket trading.

In U.S. macroeconomic news, international trade data and weekly jobless claims data are due at 8:30 a.m. ET (1230 GMT).

U.S. stocks had fallen sharply on Wednesday, with the Dow ending its four-day winning streak, as the latest economic data still pointed to anemic growth while bellwether companies disappointed on revenue.

Wednesday's decline came as the Federal Reserve said it would keep its $85 billion monthly bond-buying program in place, but may cut or increase that program depending on the state of the economy. Data showing weaker-than-expected hiring in the private sector added momentum to a selloff in equities.

Adding pressure to market sentiment, factory sector growth in China and India stumbled in April to further underline the impact of a fragile global economy, under pressure from the euro zone recession and fresh signals of weakness in the United States.




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