Reuters – U.S. stock index futures soared on Monday as investor bet that the exit of Lawrence Summers as a candidate for chairman of the Federal Reserve could mean a slower scaling back of monetary stimulus by the U.S. central bank.
Summers – one of the two primary candidates for the Federal Reserve chairmanship – announced its decision on Sunday afternoon before the U.S. central bank meets on Tuesday and Wednesday to decide when and by how much to scale back its asset purchases from the current pace of $85 billion a month.
S&P 500 futures rose 17.8 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 167 points, and Nasdaq 100 futures added 35.3 points.
In reaction to the withdrawal of Summers, the U.S. dollar slipped to a near four-week low against a basket of currencies.
With no signs of external candidates, Janet Yellen, the Fed’s current vice chair, and the other leading candidate is likely to obtain president Barrack Obama’s approval on the position.
The gains in futures come after the Dow Jones industrial average on Friday registered its best weekly gain since January though trading was subdued ahead of the Federal Reserve’s expected reduction of stimulus measures next week.
Moreover, progress was made in Syria following a Russian-brokered deal aimed at averting U.S. military action.
Furthermore, potential bidders, including private equity firms, are lining up to look at BlackBerry Ltd , but initial indications suggest that interest is tepid and buyers are eyeing parts of the Canadian Smartphone maker rather than the whole company, several sources familiar with the situation said.
Finally, Saudi billionaire Prince Alwaleed bin Talal says he will not sell any of his shares in micro blogging site Twitter Inc when it goes public, and expects the firm’s IPO to hit the market later this year or in early 2014.