Market Set for Pre-Christmas Rally

by: Jonathan Liss

U.S. futures were up sharply Friday morning, taking the baton from a strong close in Asia and solid intraday gains in Europe. The Nasdaq 100 was up 15.75 points to 2,114.25, the S&P 500 was higher by 11.6 points to 1,486.30 and the Dow gained 74 points to 13,424. European indexes were tracking broadly higher in mid-afternoon trading with gains of 1.3% to 1.4% across the board. Asian indexes were also sharply higher (full story) with the Hang Seng leading all gainers up 2.26%.

Economic reports Friday showed U.S. consumers had a negative personal savings rate for the first time in 15 months in November. Core inflation was up just 0.2% last month, less than the 0.3% expected, but Y/Y core inflation was up 2.2% - outside the Fed’s comfort zone of 1% to 2% inflation. Real disposable incomes fell 0.3% when accounting for inflation (full story).

Merrill Lynch (MER) may receive a capital infusion of as much as $5 billion from Singapore’s Temasek Holdings, according to a report in The Wall Street Journal. With a market capitalization of $46.65B as of Thursday's close, the investment could amount to a more than 10% stake in one of the U.S.’s leading investment banks (full story).

Shares of Circuit City (NYSE:CC) plunged 31% in pre-market trading, after the company posted a Q3 net loss of $208 million, or $1.26/share, against a net loss of $0.12/share a year ago. Sales were off by 3.1% to $2.96B and comparable store sales fell by 5.6%; analysts were expecting -$0.31/share on sales of $3.0 billion (full story). Walgreen Company (WAG) reported earnings that topped consensus estimates while issuing strong guidance, sending its shares higher by 6.6% in pre-market action (full story).

Vimpel-Communications (NYSE:VIP) has agreed to acquire Golden Telecom (OTCPK:GLDN), a Russian broadband and fixed-line operator, for around $4.24B, or $105/share, representing a 5% premium over GLDN's Thursday Nasdaq closing price (full story ). Royal Philips Electronics (NYSE:PHG) announced Friday morning it had agreed to acquire sleep and respiratory disorder device maker Respironics Inc. (RESP) in an all-cash deal worth €3.6 billion ($5.17 billion), a 24% premium to RESP’s closing price Thursday. (full story).

Gold gained $4.10 to $807.30, while Oil was down slightly to $91.01/bbl. 10-year treasuries were lower at 101-15 (yield = 4.07%). At 10:00 AM ET, the Michigan Consumer Sentiment report for December is due out. There are no earnings reports expected today after the closing bell. Monday is Christmas Eve; U.S. markets will close at 1:00 PM ET on December 24 and will not reopen until Wednesday December 26.

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.