U.S. stock futures up on limited Fed funding, Lehman upgrade

By Daniel | March 28, 2008

U.S. stock futures rise on limited Fed funding

Lehman Brothers up after upgrade from Citigroup; spending data on tap

By Steve Goldstein, MarketWatch

Last Update: 6:02 AM ET Mar 28, 2008

LONDON (MarketWatch) - U.S. stock futures advanced on Friday after the Federal
Reserve released data showing that primary dealers didn’t apply for as much
funding from the central bank as many had feared, with an upgrade of Lehman
Brothers also boosting sentiment.

S&P 500 futures rose 8.3 points to 1,338,10 and Nasdaq 100 futures added 10.75
points to 1,802.75. Dow industrial futures rose 73 points.

A run-up in crude-oil prices and concerns over Oracle Corp. and Google Inc.’s
outlook dented stocks on Thursday, with the Dow industrials losing 120 points,
the S&P 500 falling 15 points and the Nasdaq Composite losing 43 points.

After markets closed, the Federal Reserve released data showing investment banks
and broker dealers borrowed more than $30 billion a day from the discount window
this past week, but showed only tepid interest in a separate 28-day lending
facility from the Fed.

“This may indicate that liquidity problems are not as bad as previously thought,”
said Barry Dixon, an analyst at Davy Stockbrokers in Ireland. “Combined with a
broker upgrade of Lehman, this resulted in a rally in Far Eastern markets and
some strengthening of the U.S. dollar.”

Lehman Brothers (LEH) rose 4% in Frankfurt trade as it was upgraded to buy from
hold at Citi, noting an “extremely attractive” entry point, the recent Fed and
Treasury actions to boost liquidity and the broker’s management.

The economic calendar for Friday includes releases on personal income and the
core PCE price index for February, as well as another look at consumer sentiment
for March.

The dollar was stronger against rivals, while oil futures edged 27 cents lower to
$107.31 a barrel and gold futures fell $4 an ounce to $944.80.

Also on tap are results from KB Home (KBH), the U.S. builder that’s expected to
report a quarterly loss.

Consulting group Accenture (ACN) may rise after hiking its annual earnings
outlook and reporting a 37% quarterly profit rise.

“Accenture stated that it is not seeing any contract deferrals or cancellations
and no changes in IT budgets of its major clients, but cited a shift towards more
cost cutting oriented projects,” said Knut Woller, an analyst at Germany’s HVB.

Bear Stearns (BSC) may see pressure after Chairman James Cayne sold his entire
stake in the troubled brokerage, netting just over $61 million.

Welded steel maker Noble International (NOBL) could see pressure after cutting
its 2008 earnings outlook and reporting a widening of its fourth-quarter loss.
The company cited, among other factors, diminished North American auto
production.

Overseas, the FTSE 100 edged up 0.2% in London. The Nikkei 225 climbed 1.7% in
Tokyo.

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