Futures Higher on Bernanke Remarks

NEW YORK — Wall Street headed for a sharply higher open Friday after Federal Reserve Chairman Ben Bernanke gave investors more reason to believe further interest rate cuts are on the way.

In a speech late Thursday, Bernanke said persistently tight credit conditions, the housing slump and high energy prices will probably create some "headwinds for the consumer in the months ahead." Although he expects the U.S. will avoid a recession, Bernanke also said he believes consumers could become more cautious.

The central bank will have to be "exceptionally alert and flexible," Bernanke said.

Investors appeared to read that phrase as a sign the Fed is willing to lower interest rates again, after cutting rates at the past two meetings. The Fed meets again on Dec. 11.

Evidence of consumer reticence came Thursday in the Commerce Department's latest report on consumer spending.

The department said spending rose a modest 0.2 percent in October, the slowest pace in four months and slightly below the 0.3 percent rise analysts expected. Personal income also rose 0.2 percent last month, weaker than the 0.4 percent increase analysts projected.

Futures gained momentum ahead of the start to trading on Wall Street. Dow Jones industrials futures advanced 107, or 0.80 percent, to 13,440, while Standard & Poor's 500 index futures rose 14.70, or 1.00 percent, to 1,486.20, and Nasdaq 100 index futures added 21.50, or 1.02 percent, to 2,122.00.

The Dow has piled on about 568 points over the past three sessions as investors — now more confident that credit woes could ebb — pulled the blue chip index back from the edge of a downward correction. On Monday, the Dow's 240-point slide was enough to bring the index to a level that was down 10 percent from its October high.

There was more reassuring news for the troubled mortgage market: The White House and major banks reportedly are nearing a pact that would temporarily freeze interest rates on some subprime home loans. That could hearten investors who have poured money into safer shelters while credit markets remain tight.

Bond prices fell. The yield on the benchmark 10-year Treasury note rose to 3.96 percent from 3.94 percent late Thursday.

In corporate news, cell-phone maker Motorola said Edward J. Zander will step down as chief executive on Jan. 1 and President and Chief Operating Officer Greg Brown will take his place . Motorola has been trying to turn around its business amid falling sales and weak earnings.

Jewelry and luxury goods retailer Tiffany & Co. said third-quarter profit more than tripled on strong sales growth and a gain on the sale of its Tokyo flagship store. The results fell short of Wall Street's forecast, but Tiffany also lifted its profit outlook for fiscal 2007.

Meanwhile, oil prices slipped below the $90 a barrel mark for the first time this month. Light, sweet crude fell $1.88 to $89.13 a barrel on the New York Mercantile Exchange.

Gold edged lower as the dollar dipped against other world currencies.

Overseas markets made gains. Britain's FTSE 100 rose 0.84 percent; Germany's DAX index rose 1.24 percent and France's CAC-40 rose 0.98 percent. In Asia, Japan's Nikkei stock average closed up 1.08 percent. Hong Kong's Hang Seng index rose 0.57 percent.

Back To Top

	Stocks Mostly Higher to Cap Week	Associated Press	Fri Nov 30	0
	Stock Futures Slip on Sears Earnings	Associated Press	Wed Nov 28	0
	Stocks Slide on Fresh Credit Concerns	Associated Press	Mon Nov 26	2
	US Stock Futures Point to Higher Open	Associated Press	Tue Nov 27	1
	U.S. Stocks Head Toward Lower Open	Associated Press	Sun Dec 2	0