16th Sep 2013 12:47
LONDON (Alliance News) - All three major US stock futures indices are moving up by more than 1% ahead of the opening bell as the "Larry Rally" looks to set to push US markets higher having driven up stocks in London and the rest of Europe Monday.
Futures continue to show strong gains despite the US NY Empire State manufacturing index for September which recorded a fall to 6.24, from 8.24 in the previous month, suggesting manufacturing conditions in New York have deteriorated.
UK and European markets jumped in early trade on the news that Larry Summers has taken himself out of the race to become the new Chairman of the Federal Reserve. With Summers out of the way, Janet Yellen becomes the front runner and the market believes she is likely to taper the central banks quantitative easing program slower that Summers, keeping cheap money available for longer, providing a boost to equities.
Ahead of the US open, the FTSE 100 is up almost 1%, at 6,646.00, the FTSE 250 is up 0.6%, at 15,310.00 and the AIM All-Share is up more than 1%, close to its 2013 high, at 788.77.
News of the Summers withdrawal, combined with the weekend deal between Russia and the US on a plan to make Syria decommission its chemical weapons, has pushed gold down by more than 1% and the price of oil fall by more than 2%.
Under the Syria deal, the country must provide a full inventory of its chemical weapons stockpile within a week, destroy all production equipment by November, and then destroy or remove all the weapons from the country by mid-2014.
Some analysts say the time line is extremely ambitious, but US Secretary of State John Kerry reiterated a warning to the regime on Sunday, saying "the threat of force is real" if it did not comply with the new proposals.
Airline stocks easyJet and International Consolidated Airlines are amongst the biggest blue chip gainers of the day, up 2.3% and 2.6% respectively, due to the fall in the oil price, while gold miner Fresnillo is the biggest faller, down more than 12% as the price of gold slips.
Bond yields have fallen and the dollar is softer across the board, with the pound and the euro hitting USD1.3360 and USD1.5930, respectively.
Still to come Monday, US industrial production numbers at 1415 BST.
By Jon Darby; [email protected]; @jondarby100
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