Stock index futures pointed to a rise of nearly 1 percent at the market open on Friday after French President Nicolas Sarkozy hinted at a deal to resolve the Greek debt crisis that has hampered equities and worried investors over a possible credit dry-up.
Sarkozy said there was no time to lose on agreeing on a program for Greece, suggesting a deal needed to be reached in July at the latest.
We want to go as quickly as possible without fixing a date, Sarkozy said after meeting with German Chancellor Angela Merkel, adding that the pair had the same position on Greece.
Analysts saw his comments as a balm for spooked investors.
After a couple of volatile sessions earlier this week, the market is taking Sarkozy's words as comfort and that is translating into a rebound this morning, said Andre Bakhos, director of market analytics at Lek Securities in New York.
S&P 500 futures rose 11 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures gained 84 points and Nasdaq 100 futures added 15 points.
If the S&P 500 and Dow hold on to their expected gains Friday, the indexes could record their first positive week in seven.
Greek Prime Minister George Papandreou sacrificed his finance minister and put a rival into the job in hopes of forcing through an unpopular austerity plan.
Sarkozy and Merkel both voiced support for Papandreou and said the European Union must aid Greece. Their comments soothed investors, reining in the risk premium on Greek and Spanish bonds and boosting the euro against the U.S. dollar.
But the two European leaders gave no details on how private investors would contribute to the rescue. The issue has split the euro zone and rattled financial markets.
The FTSEurofirst 300 index <.FTEU3> rose 0.5 percent in afternoon trading.
To convince existing Greek bondholders to buy new Greek debt is going to be a gargantuan process, said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.
But the market will deal with that later. For today they're just happy that the French, Germans and the ECB look like they're coming to some sort of an agreement.
Economic data on tap includes the Reuters/University of Michigan Surveys of Consumers preliminary June consumer sentiment index, due at 9:55 a.m. EDT. Economists in a Reuters survey expect a reading of 74.0 compared with 74.3 in the final May report.
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(Reporting by Rodrigo Campos; additional reporting by European bureaus; editing by Jeffrey Benkoe)