Dow May Open Higher Following Cyprus Deal
LONDON -- Stock index futures at 7 a.m. EDT indicate that the Dow Jones Industrial Average may open 0.28% higher this morning, while the S&P 500 may open up by 0.42%.
Stocks may move higher this morning following news that a bailout deal has been agreed for Cyprus that should prevent the country from being forced into a disorderly default and possible euro exit. Cyprus will receive 10 billion euros in aid from the European Union, and all bank depositors with less than 100,000 euros in savings will be protected from losses, in line with the country's deposit guarantee scheme. The Bank of Cyprus will take over "good" assets from the Cyprus Popular Bank, which will be shut down. Bondholders and savers with more than 100,000 euros in accounts at both banks will see heavy losses, and the plan will see the country's financial sector shrink dramatically. Strict capital controls have been put in place that will prevent savers from withdrawing their funds from Cypriot banks, which remain closed today for a scheduled bank holiday but are expected to open later this week.
European stock markets rose following this news, and London's FTSE 100 was 0.93% higher by 7:30 a.m. EDT, helped by a 3.2% rise for telecom group Vodafone, which rose on renewed speculation that it is moving closer to a deal to sell its share of Verizon Wireless to Verizon later this year.
In U.S. corporate news today, Dollar General reported fourth-quarter earnings this morning. The company earned $0.97 per share on revenue of $4.21 billion, topping analyst estimates of $0.90 in EPS and $4.26 billion in sales. Meanwhile, education company Apollo Group beat on the top and bottom lines this morning, reporting second-quarter EPS of $0.34 (excluding items) on revenue of $834.4 million versus estimates of $0.18 and $822.8 million, respectively.
Dell may also return to the spotlight this morning following reports that the company is evaluating bids from both Blackstone Group and Carl Icahn, who both place a higher value on the company's shares than founder Michael Dell's private-equity-backed bid. BlackBerry stock is also likely to see further active trading today: The company's share price fell by almost 8% on Friday after it failed to impress investors with the U.S. launch of the its new Z10 smartphone. BlackBerry's shares fell by a further 5.9% in German trading this morning, suggesting that its sell-off may continue when U.S. markets open.
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The article Dow May Open Higher Following Cyprus Deal originally appeared on Fool.com.Roland Headowns shares in Vodafone but does not own shares in any of the other companies mentioned in this article. The Motley Fool recommends Vodafone. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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