(Adds quote, Merrill outlook, mortgage delinquency data)
By Justin Grant
NEW YORK, March 25 (Reuters) - U.S. stock futures pointed
to a higher open on Tuesday ahead of data that could show the
housing crisis has ebbed, while financial shares may benefit
further from a raised buyout offer for Bear Stearns <BSC.N>.
Wall Street surged on Monday on news that JPMorgan Chase
<JPM.N> boosted its offer for Bear fivefold to $10 a share and
on a surprise jump in February U.S. existing home sales data.
European stocks rose sharply on Tuesday, boosted by gains
in the financial sector, which saw the raised buyout offer for
Bear Stearns as a signal the credit crisis has bottomed out.
"The combination of the Bear Stearns bid ... and just the
stability of the market for financials has given confidence to
a lot of people," said Rick Meckler, president of investment
firm LibertyView Capital Management in Jersey City, New
Jersey.
"Today looks like more of the same with bank rallies in
Europe and the rally in Asia."
Underlying confidence in the market is still shaky,
however, as Monday's data showed the steepest year-on-year drop
in home prices since 1968.
The S&P 500 stock index has fallen about 8 percent this
year, weighed down by a slide in a financial sector battered by
the growing impact of the credit crunch on balance sheets.
JPMorgan said it expects additional write-downs in Merrill
Lynch's <MER.N> mortgage portfolio, and it lowered its earnings
forecast for the brokerage.
Merrill Lynch said in January that as of the end of 2007,
it had about $3.45 billion of exposure to bond insurers for
portfolios of asset-backed securities.
Meanwhile, major mortgage financier Freddie Mac <FRE.N>
said the single-family delinquency rate for all home loans rose
in January from December. For more see [].
"Things are looking a little better ... but at the same
time there is a lot that has got investors unnerved," said
Peter Dunay, chief investment strategist at Meridian Partners
in New York, adding:
"There probably will be some sharp declines ahead as we
work out and build this bottom for the financials."
Nevertheless, investors were hopeful ahead of a monthly
index of U.S. home prices and a gauge of U.S. consumer
confidence, which has waned in recent quarters.
S&P 500 futures <SPc1> were up 1.40 points, above fair
value, a formula to evaluate pricing taking into account
interest rates, dividends and time to expiration on contract.
Dow Jones industrial average futures <DJc1> rose 4 points, and
Nasdaq futures <NDc1> gained 6.75 points.
Standard & Poor's is due to release the S&P/Case-Shiller
home price index at 9 a.m. (1300 GMT), followed by the
Conference Board's March index of consumer confidence at 10
a.m. (1400 GMT).
Last month's S&P/Case-Shiller data showed housing prices
fell the most in the 20-year history of the index in the fourth
quarter of 2007 from a year earlier.
(Editing by James Dalgleish)
