TONY GENTILE
U.S. stocks looked set to rise on Friday morning after European leaders wrapped up their first day of a two-day summit to discuss the need for a tighter fiscal union.
Futures for the Dow Jones industrial average were up 106 points or 0.6 per cent, with about 90 minutes before markets open, suggesting that stocks will rise at the start of trading. Futures for the broader S&P 500 were up 12 points or 1 per cent.
The gains follow upward moves in Europe, where Germany's DAX index was up 2 per cent and the U.K.'s FTSE 100 was up 0.8 per cent. In Asia, Japan's Nikkei 225 fell 1.5 per cent in overnight trading.
Of course, investors are focused on Europe, where leaders are in the midst of a two-day summit to hammer out an agreement on how to proceed with a new fiscal union among member states, which would include strong budget deficit regulations. There aren't many details on what has been accomplished so far: Reports suggest that an agreement among all 27 European Union members isn't coming together, but all 17 euro zone countries have agreed to the idea that autonomy over budget deficits should be governed by an outside body.
European Central Bank president Mario Draghi, who disappointed stock markets on Thursday over his adamant refusal to increase the central bank's purchases of government bonds, gave his thumbs up to the euro zone blueprint -- and his acceptance is seen as a necessary next step to trying to resolve the debt crisis.
However, the bond market still seems rattled. According to Bloomberg News, Italian 10-year government bonds rose 11 basis points (or 0.11 percentage points) to 6.56 per cent. Spanish bond yields also rose.
David Berman