By Justin Grant
NEW YORK, March 24 (Reuters) - U.S. stock futures pointed
to a higher opening on Monday following news that JPMorgan
Chase & Co <JPM.N> was in talks to quintuple its offer to buy
Bear Stearns Cos <BSC.N>, while a further decline in commodity
prices eased inflation concerns.
Investors warmed to prospects of a higher offer for Bear as
it would avert a lengthy battle with disgruntled shareholders
and allow JPMorgan to close the transaction sooner. Bear shares
shot up more than 50 percent in pre-market trading.
JPMorgan's original agreement on March 16 to pay $2 per
share was considered a fire-sale price for the 85-year-old Wall
Street investment bank which collapsed in a liquidity crisis
after suffering large losses on soured subprime mortgage debt.
JPMorgan is in talks to lift its offer for Bear to $10 per
share, a person familiar with the situation told Reuters, in a
deal which would value the company at more than $1 billion.
"The big story today is whether there will be a higher
offer for Bear Stearns," said Peter Cardillo, chief market
analyst and chief strategist at SW Bach and Co in New York.
"We had a major sell-off in commodities and as we see
commodity prices remain stable from last week's close ... that
could give some wiggling room for stocks."
Financial shares, meanwhile, are poised to rise between 10
percent and 20 percent in the next year as panic over the
global credit crisis recedes and earnings improve, according to
the March 24 edition of the financial weekly Barron's.
"The financials have been knocked down so much, there is
going to be some good fundamental buying out there for some of
these companies," said Stephen Carl, principal head of U.S.
equity trading at The Williams Capital Group LP in New York.
"We'll see some kind of a turnaround."
In another move aimed at easing the housing crisis, the
U.S. Federal Home Loan Bank system will be allowed to expand
their holdings of Fannie Mae <FNM.N> and Freddie Mac <FRE.N>
securities by more than $100 billion under a plan endorsed by
their regulator on Monday. For more see, [].
U.S. Treasuries slipped in Asia as investors withdrew funds
from the safety of government debt while many stayed on the
sidelines to see the effectiveness of the Federal Reserve's
efforts to free up inter-bank lending before next week's month-
and quarter-end. For more, see [].
In earnings news, shares of upscale jeweler Tiffany & Co
<TIF.N> climbed more than 11 percent in pre-market trading
after it posted an unexpectedly high quarterly profit and saw
robust growth in markets outside the United States and Japan.
S&P 500 futures <SPc1> were up 13.30 points, above fair
value, a formula to evaluate pricing taking into account
interest rates, dividends and time to expiration on contract.
Dow Jones industrial average futures <DJc1> rose 97 points, and
Nasdaq 100 futures <NDc1> gained 17.0 points.
Last week, commodity prices fell across the board as metal
and oil investors took profits after a series of record peaks
this year. Investors had previously piled into gold, which
emerged as a safe haven after U.S. stocks slumped due to
recession fears and the global credit crunch.
The economic agenda includes February existing home sales
from the National Association of Realtors at 10 a.m. (1400
GMT).
(Editing by James Dalgleish)
