U.S. Stock Futures Rise as Lawmakers Support Bank Rescue Bill

Oct. 3 (Bloomberg) -- U.S. stock-index futures climbed as lawmakers who helped defeat a $700 billion bank-rescue package said they may switch their votes today.

Citigroup Inc. gained 2.1 percent and Morgan Stanley advanced 1.1 percent after at least eight lawmakers in the House of Representatives who voted against the rescue plan this week said they now support the measure. Four others said they may switch their ballots on the bill, which failed by a dozen votes on Sept. 29.

Futures suggested the Standard & Poor's 500 Index may pare an 8.1 percent drop this week, the steepest since markets opened after the Sept. 11, 2001, terrorist attacks. Reports on jobless claims and factory orders yesterday reignited concern the economy is sinking into a recession, while data today may show the U.S. lost jobs in September for a ninth month.

``That bill will get passed,'' Andy Brough, who oversees about $8 billion at Schroder Investment Management Ltd. in London, said in an interview on Bloomberg Television. ``Bank profitability could get rebuilt incredibly quickly.''

Futures on the S&P 500 expiring in December gained 7.2, or 0.6 percent, to 1,131.40 at 10:23 a.m. in New York, Dow Jones Industrial Average futures added 42, or 0.4 percent, to 10,599. Nasdaq-100 Index futures rose 7.5, or 0.5 percent, to 1,518.

Global Stocks

Equities retreated from Sao Paulo to London to Tokyo this week, sending the MSCI All-Country World Index to a 9 percent decline, as an increase in bank failures exacerbated the credit freeze that pushed up borrowing costs for companies and consumers around the globe.

The Labor Department's September jobs report and the Institute for Supply Management's index of service industries, both due today, will help investors gauge how much the credit crisis has spilled over into the broader economy.

Citigroup, the New York-based firm that bought Wachovia Corp.'s banking business, added 2.1 percent to $22.98. Morgan Stanley, which converted into a bank holding company after short-term lending markets froze, increased 1.1 percent to $23.46.

The House is scheduled to vote again on the rescue plan at about 12:30 p.m. Washington time. The legislation allows the government to buy troubled assets from financial institutions rocked by record home foreclosures. It contains provisions favored by House Republicans, including $149 billion in tax breaks, a higher limit on federal bank-deposit insurance and changes in securities law.

It also reiterates securities regulators' authority to suspend asset-valuing rules that corporate executives blame for fueling the crisis. The Senate on Oct. 1 approved the $700 billion bill, in a 74-25 vote.

Economic Reports

Payrolls probably fell by 105,000 last month, the biggest decline in five years, according to the median estimate of economists surveyed by Bloomberg News. The Labor Department report, the last before the presidential election, may also show the unemployment rate was unchanged at a five-year high of 6.1 percent.

The ISM's index of non-manufacturing businesses, which make up almost 90 percent of the economy, probably slipped to 50 from 50.6, according to the survey median. A reading of 50 is the dividing line between growth and contraction.

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