Stock futures pointed to a flat to higher open on Tuesday as investors weighed Bank of America Corp's sale of a stake in a Chinese bank and Ford Motor Co signaled it would take advantage of a recent rally by selling stock to raise cash.
Bank of America
Everyone is trying to take advantage of the strong market, said Peter Cardillo, chief market economist at Avalon Partners in New York. Raising capital via equity is always short-term negative, but a short-term negative with a long-term positive aspect attached to it
S&P 500 futures rose 4.10 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 added 5
points, and Nasdaq 100 futures gained 5 points.
U.S. banks have been in focus recently after government stress tests forced many financial institutions to raise extra capital to shore up their balance sheets. Shares of Bank of New York Mellon Corp
Federal Reserve Chairman Ben Bernanke said late Monday the stress tests of how 19 major banks would endure a sharp downturn in the economy already appear to be helping banks gain access to private capital, a key element in economic recovery.
Shares in Boeing Co
JPMorgan raised its price target on Capital One Financial Corp
U.S. stocks fell Monday as investors booked profits in financials after a two-month run-up and on worries that stock offerings by several banks might have a dilutive effect on current shareholders.
Since reaching 12-year closing lows in early March, the Dow Jones industrial average is up 30.1 percent and the S&P 500 is up 36.4 percent.
(Reporting by Edward Krudy; editing by Jeffrey Benkoe)