Wall Street looks for upbeat open

December 8, 2008 By JOE BEL BRUNO AP Business Writer

Wall Street was set for an upbeat start on Monday, with investors enthusiastic that President-elect Barack Obama's plan to launch the largest infrastructure-spending package since the 1950s will help boost the crippled economy.

Obama announced over the weekend plans for the largest U.S. public works spending program since the creation of the interstate highway system a half-century ago. That could bolster the economy by putting thousands of people to work building schools and other construction projects.

Investors also appeared more comfortable that the government is closer to legislation that would dole out billions to America's three biggest automakers within a week. Congress is expected to pass a $15 billion bailout for Ford Motor Co., General Motors Corp., and Chrysler as soon as Tuesday.

Obtaining the aid might come in exchange for the jobs of the companies' top executives. Sen. Chris Dodd, D-Conn., who chairs the Senate Banking Committee, said Sunday that Rick Wagoner, GM's chief executive, "has to move on."

Major U.S. stock indexes fell last week after a number of negative reports seemed to indicate the recession is showing no signs of weakening. However, as the week progressed, the market appeared to be taking the bad news in stride — even Friday's Labor Department report that showed the nation lost more than a half a million jobs last month. The report raised hopes that the government would take more steps to stimulate the economy.

Scott Fullman, director of derivative investment strategies with WJB Capital, warned that any move higher for U.S. markets should be treated cautiously. He said credit still remains tight around the world, and that there are still a number of other worries hanging over the market.

"There's a chance we could be higher for the day, but I'd be very cautious about jumping in with both feet and expecting what could be a Santa Claus rally going into the New Year," he said. "The fact is, we're not seeing the credit markets opening up, we're not seeing buying of the distressed debt, and that leads to additional worries for stocks."

Ahead of the opening bell, Dow Jones industrial average futures rose 243, or 2.82 percent, to 8,855. Standard & Poor's 500 index futures rose 29.50, or 3.38 percent, to 901.90; and Nasdaq 100 futures added 34.75, or 2.95 percent, to 1,213.00.

Stocks rallied globally as investors took heart from signs the world's largest economies are redoubling efforts to revive growth. In China, government officials this week are meeting to discuss possible new steps to expand the $586 billion stimulus that is already in place.

Hong Kong's Hang Seng index vaulted 8.7 percent to its highest close in seven weeks, while Japan's Nikkei 225 average jumped 5.2 percent. Major European bourses also surged, with Britain's FTSE-100 climbing 5.3 percent, Germany's DAX up 6.5 percent, and France's CAC-40 adding 7 percent.

In other corporate news, Tribune Co. might be heading toward bankruptcy. The owner of the Los Angeles Times and Chicago Tribune, other newspapers and the Chicago Cubs and Wrigley Field, has hired financial advisers ahead of a possible filing for bankruptcy court protection, according to reports on Sunday. The Chicago Tribune reported that its parent hired investment bank Lazard Ltd. and law firm Sidley Austin as it considers its financial options.

Merrill Lynch & Co. Chief Executive John Thain has suggested to directors that he receive a 2008 bonus of as much as $10 million, The Wall Street Journal reported, citing people familiar with the situation. However, the company's compensation committee is said to be resisting the request. On Friday shareholders of Merrill and Bank of America Corp. approved the combination of the companies.

3M Co. is cutting 1,800 jobs in the fourth quarter and ordering some workers to take vacation or unpaid time off for the last two weeks of the year. The Maplewood, Minn.-based manufacturer had earlier announced 1,000 job cuts in the third quarter. The 1,800 new layoffs will come from the U.S., Western Europe and other developed nations.

Oil prices bounced off four-year lows after OPEC's president suggested the group could surprise investors with a large production cut later this month. Light, sweet crude rose $2.99 to $43.80 a barrel in electronic trading on the New York Mercantile Exchange.

Bond prices fell as stocks futures moved higher, with yields continuing to move above record lows. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 2.79 percent from 2.70 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, was unchanged from late Friday at 0.01 percent.

The dollar was mixed against other major currencies, while gold prices fell.