Wall Street set to open higher on Greek hopes, China bounce

By Tanya Agrawal

REUTERS - Wall Street was set to open sharply higher on Friday on hopes that Greece might be able secure fresh funding and after China's premier said the country's economic growth was stabilizing.

Greek Prime Minister Alexis Tsipras appealed to his party's lawmakers to back a tough reform package that won praise from France, which called the new proposals "serious and credible."

Greece has asked for $59 billion to help cover debts until 2018 and has pledged new tax hikes in return. Euro zone finance ministers will meet on Saturday to decide on a third bailout for Athens.

U.S. markets had fallen sharply earlier in the week as concerns over a slowdown in China, a drop in commodity prices and the Greece crisis spooked investors.

 

"The U.S. market is a little bit over valued and is looking to correct," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

"The fall we saw last week was the market looking for every little reason to correct."

Global markets were supported by a continued recovery in China's stock market, which rose strongly for a second day, helped by a barrage of support measures from the government.

Chinese authorities have cut interest rates, suspended IPOs, relaxed margin lending and collateral rules and enlisted brokerages to buy stocks, backed by cash from the central bank.

Chinese Premier Li Keqiang said the country would make more targeted changes to its policies to support the economy and promised to increase the transparency of China's capital and money markets.

Investors will also look for clues regarding the timing of an interest rate hike in the United States, when Federal Reserve Chair Janet Yellen speaks at a conference in Cleveland, Ohio.

Yellen, scheduled to speak at 12:30 p.m. ET (1630 GMT), will give her views on the prospects for U.S. growth, inflation and the job market.

Data expected on Friday includes wholesale inventories, which are expected to have increased 0.3 percent in May, a slower pace than the previous month. The numbers are expected at 10 a.m. ET.

S&P 500 e-minis were up 26 points, or 1.27 percent, with 299,369 contracts traded at 8:36 a.m. ET. Nasdaq 100 e-minis were up 54.75 points, or 1.26 percent, on volume of 45,690 contracts while Dow e-minis were up 191 points, or 1.09 percent, with 42,244 contracts changing hands.

U.S. quarterly earnings season kicked off earlier this week and Cardillo said corporate reports from big names like Pepsi and Alcoa were encouraging.

Corporate earnings are estimated to have fallen 3.1 percent for the second quarter, according to Thomson Reuters data.

Barracuda Networks' shares slumped 15.6 percent to $33.02 in premarket trading after JPMorgan cut its price target on the data storage and security provider's stock.

Zillow fell 3.2 percent to $82.53, a day after the company said its chief financial officer was leaving the company to pursue other business interests.

Syngenta rose 4.2 percent at $83.79 after Monsanto President Brett Telemann allayed concerns of some U.S. soybean growers that a deal between the two could push up prices. Monsanto was up 0.3 percent at $106.82.

(Reporting by Tanya Agrawal; Editing by Saumyadeb Chakrabarty)