Dow May Open Higher Despite Fiscal-Cliff Standoff

LONDON -- Stock index futures at 7 a.m. EST suggest that the Dow Jones Industrial Average (DJINDICES: ^DJI  ) may open up by 0.25% this morning, while the S&P 500 (SNPINDEX: ^GSPC  ) is also expected to rise by 0.25% when trading starts.

Today's economic calendar starts at 9 a.m. EST with the November Markit PMI, which is expected to remain unchanged at 52.4. At 10 a.m. EST will come November's ISM manufacturing report, which is expected to fall slightly from 51.7 to 51, and October's construction spending figures, where a 0.5% increase is expected, down slightly from 0.6% in September. The final item in today's data calendar will be November's motor vehicle sales, which are expected to have risen from 14.2 million to 14.8 million.

However, the impact of Hurricane Sandy may mean that these data are largely disregarded by investors, who are expected to remain focused on the progress of the fiscal-cliff negotiations in Washington.

No major corporate-earnings reports are expected today, but shares in Delta Air Lines may see some activity after it was reported earlier today that Singapore Airlines is in talks to sell Delta its 49% stake in British carrier Virgin Atlantic.

European markets
In Europe, most major markets managed modest gains this morning, helped by news that China's manufacturing sector appears to be returning to growth. The November HSBC China manufacturing PMI came in at 50.5, up from 49.5 in October. Readings of more than 50 indicate growth. Investors were also cheered when India's manufacturing PMI rose to 53.7 after making its biggest gain in five months.

This morning, Greece announced the terms of its bond buyback program, which were more generous than those originally proposed. However, there are concerns that many of the hedge funds and banks holding the bonds will want to hold on for further gains and may be reluctant to sell at this time.

As of 7:30 a.m. EST, the DAX is up 0.8%, the CAC 40 is up 1%, the FTSE MIB is up 1.5%, and the IBEX 35 is up 1%. In London, the FTSE 100 (FTSEINDICES: ^FTSE  ) is up about 0.5%, with big gainers including miners Fresnillo and Rio Tinto, which rose on hopes that China's manufacturing growth will now resume.

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