NEW YORK - Stocks headed for a bounce at the open on Wednesday as investors looked to snap up beaten-down shares after Tuesday's slide to three-month lows.
A speech later in the day by President Barack Obama to announce a plan to stem home foreclosures would likely offer investors more direction after government data showed U.S. housing starts and permits dropped to record lows in January.
Advancers before the bell included financial shares, with Citigroup Inc
We are going to bounce this morning, said Arthur Hogan, chief market analyst at Jefferies & Co in Boston. Today is another day where you come and look at spots where you're oversold. It will be a reflex rally after a short-term oversold market.
S&P 500 futures rose 7.30 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 56 points, and Nasdaq 100 futures gained 12.50 points.
A lot is riding on what Obama says about how his administration plans to stabilize housing, whose downturn has slammed household wealth and forced banks to take big write-downs due to soured mortgages and other securities.
The Obama administration has closely guarded details of the roughly $50 billion plan but sources familiar with it have said it would be bolder than prior efforts to stem foreclosures. Obama will outline the plan in a speech in Mesa, Arizona at 12:15 p.m..
In earnings news, Deere & Co
Tuesday's slide extended the benchmark S&P 500's <.SPX> drop since the start of 2009 to 12.6 percent. The index began the year up more than 20 percent from its November bear market low but, through Tuesday's close, has more than halved that advance.
(Editing by James Dalgleish)