The sharp rise in stock market futures contracts Tuesday was to be expected given the extreme volatility that has been the hallmark of Wall Street's behavior for more than a month. At the same time, the sometimes light volume of futures trading can make it difficult to determine the market's overall mood. In recent weeks, stock futures have moved solidly in one direction, while actual trading was more moderate after the opening bell.
Still, a rebound appeared likely early Tuesday after the Dow Jones industrials fell more than 200 points Monday on worries about the economy, giving the blue chips a loss of more than 500 over two sessions. A worldwide rally after huge losses Monday likely helped sentiment early Tuesday.
Dow Jones industrial average futures rose 336, or 4.19 percent, to 8,347. Standard & Poor's 500 index futures gained 37.00, or 4.43 percent, to 871.70, while Nasdaq 100 index futures rose 51.50, or 4.43 percent, to 1,213.50.
Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose 3.78 percent from 3.69 percent late Monday. The yield on the three-month Treasury bill, regarded as the safest investment around and an indicator of investor sentiment, rose to 0.84 percent from 0.77 percent Monday. A higher yield indicates a dip in demand.
The dollar was mixed against other major currencies.
Investors worldwide snapped up stocks after Monday's rout. Japan's Nikkei stock average jumped 6.41 percent and Hong Kong's Hang Seng index surged 14.4 percent - its biggest gain in 11 years - a day after plunging more than 12 percent. In morning trading, Britain's FTSE 100 rose 2.57 percent, Germany's DAX index jumped 10.63 percent, and France's CAC-40 rose 0.44 percent.
The moves come as Fed policymakers plan to convene a regularly scheduled meeting on interest rates. The central bank is expected to lower its fed funds rate by a half-point to 1 percent on Wednesday, a move that could bolster some investors' confidence by making borrowing more attractive.
The disruptions in the normal flow of the credit markets over the past six weeks have produced widespread worries about the economy's ability to avoid a severe downturn given. The evaporation in lending is making it difficult and more expensive for businesses and consumers to borrow money.
But Monday saw the start of the Fed's efforts to revive lending in the commercial paper market, where companies turn for short-term loans. General Electric Co., for example, has agreed to borrow money from the Fed.
Uncertainty about the economy likely will continue to buffet trading. Some of Wall Street's gyrations since the mid-September bankruptcy filing of Lehman Brothers Holdings Inc. and the subsequent seizing up of the world's credit markets are tied to massive selling by hedge funds and mutual funds trying to raise cash for nervous investors.
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