Before the bell: Futures climb as Bank of America to pay back TARP funds

Posted Dec 3rd 2009 7:45AM by Melly Alazraki
Filed under: Before the Bell, Deals, General Electric (GE), Employees, Market Matters, Bank of America (BAC), Comcast Cl'A' (CMCSA), Economic Data, Federal Reserve

U.S. stock futures were higher Thursday morning as investors' confidence was boosted by an announcement that Bank of America (BAC) will be paying back the $45 billion it received in bailout funds and at news that General Electric (GE) and Comcast (CMCSA) are finalizing their deal to form a joint entertainment company. Data on retail sales and jobs are also in focus this morning.

On Wednesday, U.S. stocks ended up mixed as Wall Street reacted to different news, such as the lower job losses number from ADP, record gold prices, the Fed's Beige Book and GM's management shakeup.

Late Wednesday, Bank of America said it would repay $45 billion of taxpayer bailout funds. The move will free the bank from pay restrictions as it looks to hire a new CEO, but also makes it more vulnerable to further economic shocks. Investors, however, took this as a sign that economic conditions are improving. Meanwhile, Treasury Secretary Timothy Geithner affirmed Wednesday the $700 billion financial bailout program will end soon.

Also, Comcast agreed to buy a majority stake in NBC Universal through a venture with General Electric that values the entertainment company at about $37 billion. Comcast will contribute $6.5 billion in cash and cable channels worth $7.25 billion to the new venture. Jeffrey Zucker will lead the new entity.

On the economic front, several indicator are due out today:

At 8:30 a.m. Eastern, the Labor Department will report the weekly continuing and initial jobless claims. While economists expect more Americans have filed new claims for unemployment, they also project continuing claims will decline.
At 10:00 a.m., ISM services is due out and is expected to have ticked up in November.
Retailers will release sales figures for November in the morning. The figures will include Black Friday.

Meanwhile, U.S. online job postings fell slightly in November, due to a dip in demand for health care-related positions and employers' continued unease regarding economic recovery, Monster Worldwide Inc (MWW), an online careers and recruiting company, said.

Also this morning, at 10:00 a.m., the Senate Banking Committee is scheduled to hold a confirmation hearing on Federal Reserve Chairman Ben Bernanke second term. Bernanke is expected push back at efforts to curb the Fed's power.

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