* Washington sets rescue of Citigroup; stock jumps 50 pct
* Obama to unveil his economic leadership team
* Financial shares poised to lead market's advance
* For up-to-the-minute market news, please click on
STXNEWS/US
(Recasts first paragraph, updates prices)
By Ellis Mnyandu
NEW YORK, Nov 24 (Reuters) - U.S. stocks headed for a
higher open on Monday after the U.S. government agreed to pump
$20 billion of new capital into Citigroup <C.N>, averting a
bank collapse that could have crippled the world's financial
system.
Shares of Citigroup jumped more than 50 percent to $5.80
before the bell as investors welcomed the rescue of the No. 2
U.S. bank, whose shares last week plunged to their lowest
levels in about 15 years amid a crisis of confidence.
It was the biggest bank bailout yet and a measure of the
crisis sweeping the world.
The news lifted other financial shares. Bank of America
<BAC.N> was up 6.3 percent to $12.19, Morgan Stanley <MS.N> ,
up 7.5 percent to $10.80 and Goldman Sachs <GS.N>, rose 4
percent at $55.40.
The Citigroup rescue, along with Friday's news that
President-elect Barack Obama would appoint current New York
Federal Reserve Bank President Timothy Geithner as U.S.
Treasury Secretary, underpinned positive sentiment.
The market is also anticipating details on Obama's plan for
a two-year economic stimulus package involving the creation of
2.5 million jobs over two years.
"There's good momentum coming our way. A lot of the things
we were concerned about needed answers," said Arthur Hogan,
market analyst at Jefferies & Co in Boston.
"One of the things we needed an answer to was who was going
to be the Treasury Secretary, and we got that on Friday.
Another thing we needed an answer to was what we were going to
do with Citigroup, and we got the answer to that last night."
S&P 500 futures <SPc1> rose 19.50 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 <DJc1> jumped
119 points, and Nasdaq 100 <NDc1> futures climbed 16.50
points.
But even with the positive momentum, there was likely to
still be caution as the market tries to recover from 11-year
lows and concern remains about the fate of the U.S. auto
companies, including General Motors <GM.N> , which are seeking
billions in government financial aid.
A report on October existing home sales, due at 10 a.m.
(1500 GMT), could also show more deterioration in housing. In a
bid to bring calm to the market, Obama is due to announce his
economic leadership team at 12 noon (1700 GMT) on Monday.
Citigroup's rescue follows the disappearance or
bankruptcies of such Wall Street names as Bear Stearns Cos,
Lehman Brothers Holdings Inc <LEHMQ.PK> and Washington Mutual
Inc <WAMUQ.PK>.
In addition to the new capital, Washington effectively
guaranteed most of Citi's $306 billion losses on high-risk
assets.
Energy shares, including Exxon Mobil <XOM.N>, may get a
boost from a 1 percent rise in crude oil prices to $49 a
barrel, caused by the continuing economic doom.
(Editing by Kenneth Barry)
