U.S. stock index futures pointed to a higher open Wednesday as the House of Representatives passed a Senate-approved bill intended to avert the fiscal cliff of tax increases and spending cuts.
The futures on the Dow Jones Industrial Average were up 1.34 percent, the futures on the Standard & Poor's 500 Index were up 1.44 percent and those on the Nasdaq 100 Index were up 4.2 percent.
The Republican-controlled House of Representatives Tuesday night approved the bill for avoiding the fiscal cliff by a vote of 257 to 167. Investors looked for this deal to prevent the global economy from falling into a recession.
Investors are likely to focus on the Institute of Supply Management’s (ISM) manufacturing Purchasing Managers’ Index (PMI), to be reported Wednesday. The manufacturing PMI, which rates the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries and inventories, is expected to rise to 50.2 in December from 49.5 in November. A level above 50 represents expansion in the industry.
Investors are also expected to focus on the Construction Spending index, to be reported by the Census Bureau Wednesday. This index, which measures the change in the total amount spent on construction, is expected to rise 0.6 percent in November, down from a 1.4 percent gain in October.
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On Monday, U.S. stocks rose as investor confidence turned positive amid reports that Congressional leaders were progressing to reach an agreement to finalize the deal to avoid the fiscal cliff. The Dow Jones Industrial Average rose 1.28 percent, the S&P 500 Index was up 1.69 percent and the Nasdaq Composite Index gained 2 percent.
Asian stocks rose Wednesday as investor sentiment was lifted by the news that the U.S. Congress passed the deal to prevent the fiscal cliff. According to the HSBC PMI released Wednesday, South Korea’s manufacturing activity expanded in December to end six months of contraction. The reading of the PMI, a measure of the nationwide manufacturing activity, rose to 50.1 in December compared with a reading of 48.2 in November.
Hong Kong’s Hang Seng Composite gained 655.06 points, India’s Sensex rose 153.92 points and South Korea’s Kospi Composite advanced 34.05 points.
European stocks rose Wednesday tracking global cues. London's FTSE 100 was up 90.34 points, Germany's DAX 30 advanced 150.47 points and France's CAC 40 gained 58.54 points.