June 10, 2012 / 10:53 PM / 6 years ago

Futures gain one percent on Spain aid deal

NEW YORK (Reuters) - Stock index futures pointed to steep gains on Sunday, looking to extend Wall Street’s recent rally after euro zone finance ministers agreed on an aid package to help Spain.

Traders work on the floor of the New York Stock Exchange June 8, 2012. REUTERS/Brendan McDermid

Futures opened up more than 1 percent on the news that the ministers would lend Spain up to 100 billion euros ($125 billion) to help the country’s battered banks.

The size of the aid package was larger than expected, removing a huge cloud that has been hanging over financial markets. Investors had feared that a banking crisis in the euro zone’s fourth-largest economy could have compounded the currency bloc’s troubles with Greece.

“This is a major step in avoiding a contagion,” said Tim Speiss, partner-in-charge of EisnerAmper’s Personal Wealth Advisors Group in New York.

“The amount is pretty high, higher than expected. Although we need to get more details, at least for equity markets in the U.S. and around the world, this definitely eases short-term fears,” Speiss said.

S&P 500 futures rose 17.4 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 152 points and Nasdaq 100 futures rose 35.75 points.

With the rise, futures pointed to Wall Street extending the previous week’s advance, which was the S&P 500’s best of 2012. The week’s gains came after sources told Reuters that Spain was expected to soon ask the euro zone for a bailout.

Cyclical sectors, including energy and financials, are likely to be among the biggest gainers on Monday. Both groups, which are tied to the pace of economic growth, have been pressured by the uncertainty in Europe in recent weeks.

Editing by Gary Crosse

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