Stock futures surge on rescue plan

By staff

NEWYORK( -- U.S. stock futures soared Monday, positioning Wall Street toward joining a worldwide rally, after European Union officials approved a $900 billion bailout to stabilize the euro and rescue debt-choked Greece.

At 9:15 a.m. ET, Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were all sharply higher.

Futures measure current index values against perceived future performance and offer an indication of how markets may open when trading begins.

"I think it's obvious what's going to move the market today, considering what went on in Europe this weekend," said Peter Boockvar, chief market strategist with Miller Tabak & Co.

The European rescue package, valued at more than $1 trillion, has three main components. The biggest provision will use nearly $570 billion to create government-backed loans meant to shore up confidence in shaky credit markets.

"Europe has taken its playbook from the [U.S.] Fed[eral Reserve]," Boockvar said. "It's chosen to inflate its way out of the debt problem rather than really deal with it."

On Friday, stocks slumped as investors remained uncertain about Europe and spooked about Thursday's wild market swings, in which the blue-chip Dow Jones industrial average fell nearly 1,000 points before rebounding by nearly two-thirds. The three major indexes ended in negative territory Friday for the year to date.

World markets: Stock markets around the world advanced on the euro zone news. In afternoon trading in Europe, the CAC 40 in France surged 7%. Britain's FTSE 100 and Germany's DAX were also sharply higher, with gains of almost 5%.

In Asia, Japan's Nikkei index ended Monday's session 1.6% higher and the Hang Seng in Hong Kong rallied 2.8%.

On Monday, the Bank of England announced it will leave its key interest rate unchanged at 0.5%.

Dollar: The dollar was down 1.4% against the euro and fell 1.6% on the British pound, but it was up 1.5% on the Japanese yen.

Bonds: Treasury prices fell sharply Monday, pushing the benchmark 10-year yield up to 3.60%. Bond prices and yields move in opposite directions. To top of page

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