US pre-open: Firm start expected as market waits for Spain
Tue 02 Oct 2012
LONDON (SHARECAST) - US markets are set to open higher as hopes rise - not for the first time - that a bailout request from Spain is imminent.
However, Spanish press agency Europa Press cited the country’s Prime Minister, Mariano Rajoy, as having said that he will not call for a rescue this weekend. Be that as it may, many market commentators seem to be of the opinion that Spain must ask for aid quickly if it wishes to retain access to capital markets.
Spread betting quotes suggest that the Dow Jones will open around 20 points up from last night's close of 13,515 while the broader based S&P 500 is tipped to start four points firmer.
Banks could be in focus early on after Credit Suisse turned bullish on the sector. US banking giant JP Morgan Chase, meanwhile, has been hit with a lawsuit by the New York Attorney General for allegedly defrauding investors of more than 20 billion dollars through mortgage-backed securities sold by Bear Stearns.
JP Morgan, which bought ailing investment bank Bear Stearns in March 2008, said it would contest the allegations, which are based on deals done between 2005 and 2007.
It said the civil action related entirely to Bear Stearns, which it acquired "over the course of a weekend at the behest of the US government".
Mortgage-backed securities were the financial products that were at the heart of the global financial crisis.