U.S. Stock Futures Advance

By Saumya Vaishampayan 

U.S. stock futures rose Monday, rebounding from steep declines on Friday, amid news of more stimulus from China and upbeat corporate news.

S&P 500 futures advanced 10 points, or 0.5%, to 2085. E-mini Dow futures gained 90 points, or 0.5%, to 17860, and e-mini Nasdaq-100 futures rose 14 points, or 0.3%, to 4363. Changes in stock futures don't always accurately predict moves in the stock market after the opening bell.

A move from China's central bank to free up about $200 billion for banks to lend attracted attention across the globe, part of China's efforts to stimulate growth. The People's Bank of China on Sunday announced it would cut the reserve requirement by one percentage point, its second reduction in less than a quarter and the biggest since December 2008. The decision came just days after fresh evidence of China's slowing economy. Hong Kong's Hang Seng Index posted its biggest one-day decline this year, while the Shanghai Composite fell 1.6%.

European stocks added to the positive tone. Germany's DAX advanced 1.4% and France's CAC 40 added 0.4%. The Stoxx Europe 600 rose 0.7%, after posting its worst daily loss in three months on Friday.

In corporate news, Morgan Stanley's first-quarter profit and revenue rose, beating Wall Street estimates, as the bank benefited from a stronger environment for deals and trading. Shares rose 2% premarket.

Merck & Co. shares rose 1.3% in premarket trading. A study showed Merck's new cancer drug Keytruda improved the survival odds of patients with the skin cancer melanoma compared with Bristol-Myers Squibb Co.'s Yervoy. Merck also said it has filed for U.S. regulatory approval to market its drug as a treatment for lung cancer.

While the Chinese move helped buoy markets in Europe and the U.S. Monday, it isn't all good news for investors, said Peter Cardillo, chief market economist at broker-dealer Rockwell Global Capital.

"It means that the world's economy is subject to even slower growth, which means the potential for lower future earnings," he said. Mr. Cardillo said he's expecting a correction in the shorter term, but remains positive on stocks for the year.

Stocks fell Friday, with the Dow slipping 1.5% to 17826.30. The S&P 500 fell 1.1%, to 2081.18, and the Nasdaq Composite lost 1.5% to 4931.81.

In commodity markets, gold futures slipped 0.4% to $1198.50 an ounce. Crude-oil futures fell 1.2% to $56.61 a barrel.

The yield on the 10-year note rose to 1.872% from 1.849% on Friday. Yields rise as prices fall.

Write to Saumya Vaishampayan at [e-mail]

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