U.S. stocks: Futures rally amid ECB QE chatter

U.S. stock futures pointed to a sharply higher open for Wall Street on Monday, tracking gains in Europe, where stocks surged on reports the European Central Bank’s bond-buying plan is taking shape.

Strategists said investors are wading back into markets on the heels of last week’s selloff, while a clutch of deal news is driving a handful of shares higher.

Futures for the Dow Jones Industrial Average DJH5, +0.38% rose 96 points, or 0.5%, to 17,745, while those for S&P 500 futures SPH5, +0.10% added 11.80 points, or 0.6%, to 2,047.10. Futures for the Nasdaq-100 index NDH5, +0.14% jumped 23.75 points, or 0.6%, to 4,224.50.

The Stoxx Europe 600 index SXXP, +0.58% surged 1% after CNBC reported, citing sources, that the ECB is planning a quantitative-easing program that could be based on contributions made by central banks into the ECB.

Much of the move seen in U.S. futures is indeed linked to that, said Wouter Sturkenboom, strategist at Russell Investments in London. But he also credited some of the gains to a counter-reaction to Friday’s move. Stocks finished last week slightly lower, with the S&P 500 SPX, -0.84% backing off 0.8% on Friday after the December jobs report revealed a fall in wages.

Still, Sturkenboom said the fall in oil prices Monday leaves him wary. Crude futures fell sharply, triggered by sharp cuts by Goldman Sachs to its oil-price projections. The investment bank slashed its Nymex 2015 crude forecast to $47.15 a barrel, from $73.75 a barrel, and cut its Brent estimate to $50.40 a barrel, from $83.75 a barrel.

The focus will also shift to the earnings season, as Alcoa AA, +1.68% reports after the bell and a bevy of big banks follow, beginning midweek. Earnings for the fourth quarter are tapped to have increased 1.1%, according to FactSet, less than the 1.6% gain estimated at the end of the fourth quarter.