Equity futures are pointing to gains again this morning, after a back-and-forth day yesterday that resulted in new two-year highs for the S&P, but ended mixed for the broad market. S&P futures are currently +3 vs. fair value, while DJ futures are +25. This morning's early bid follows broad strength in overseas markets overnight, with the optimistic trade being attributed to a lack of immediate response by the North in Korea and comments from China in support of the EU. These positive headlines are offsetting a Moody's warning that it put Portugal 's credit rating on review for downgrade.
Asian stocks finished the day with solid gains (Nikkei +1.5%, Hang Seng +1.6%, Shanghai +1.8%), amid reports that North Korea eased up on threats to retaliate against the South, and that North Korea offered to allow U.N. inspectors back to inspect its nuclear facilities. Also, not surprisingly, the Bank of Japan left rates unchanged near 0%, and kept its asset purchase plans unchanged.
The strength in Asia carried over to European stocks, which started the day higher following reports that Chinese Vice Premier made comments in support of the measures taken by the EU and IMF, and indicated that China has taken "concrete action" to help the EU with sovereign debt problems. These comments helped the euro overnight, but its gains were cut short when Moody's warned it placed Portugal 's credit ratings on review for a possible downgrade. The Moody's headlines pared some of the euro's gains (it is currently +0.003 at $1.3161/euro), but European stocks are still showing broad gains at mid-day (FTSE +0.7%, CAC +0.5%, DAX +0.6%).
In U.S. corporate news, there were a few pieces of M&A announced since yesterday's close. MATK is being acquired by Royal DSM for $31.50 per share in a deal worth $1.087 bln, representing a 35% premium to MATK's closing price yesterday. Additionally, LCRD will be acquired by ASSA ABLOY AB for $6.25 per share in a transaction worth ~$80 mln, representing a premium of ~38% over the prior day's closing price. In earnings news, ADBE and JBL are both up by ~5% following better than expected reports. Later this morning we'll get earnings reports from CCL, CAG, KMX and CMC, while NKE, HOV, RHT and TIBX earnings will be of interest tonight after the close.
Yesterday's volume was on the lighter side, with NYSE volume of 830 mln shares, vs. the average of 1079 mln. Volume is likely to lighten up even more as the week progresses and desks clear out for the holidays, making for choppy trading conditions.