Stocks headed for a higher open on Wednesday, with financials set to lead another climb as investors bet Washington will soon restore confidence in banks by relieving them of money-losing assets.
A day after a surge in financial stocks fueled the biggest one-day rally since late November, banks again underpinned pre-market gains, with Bank of America
In an interview on the Public Broadcasting Corp's Charlie Rose Show, U.S. Treasury Secretary Timothy Geithner said he wanted to make it compelling for banks to cleanse balance sheets of toxic assets and will move quickly in coming weeks to set up details for financing bad asset sales.
Andre Bakhos, president of Princeton Financial Group in New Brunswick, New Jersey, said: It appears that we will have a continuation of the speculation that the negative conditions, especially in banking will be relieved shortly.
The market is continuing to respond to the one-dimensional fix, which was Citigroup. It will take clarity on the toxic assets plan to add confidence.
S&P 500 futures rose 8.40 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 climbed 59 points, and Nasdaq 100 futures climbed 16 points.
Further rises would extend gains seen in Asia overnight and then in Europe on Wednesday and mark the first back-to-back advance for the benchmark S&P 500 <.SPX> index in a month.
Geithner, who has faced criticism for not spelling out details of a proposed public-private fund for buying bad assets from banks, promised action within weeks and said he was moving deliberately to minimize risks of losses for taxpayers.
Relieving banks of toxic, hard-to-sell assets could help stem a wave of writedowns that has fueled unease about banks' stability.
Citigroup's comments on Tuesday that it was profitable in early 2009 and confident about its capital strength sparked hopes some stabilization might be creeping back into banking in a market trying to recover from 12-year lows.
Geithner will hold a briefing at 1 p.m. EDT ahead of a weekend meeting of Group of 20 rich nations finance ministers and central bank governors.
(Editing by James Dalgleish)