(Updates with Merrill Lynch, Teva)
By Kristina Cooke
NEW YORK, Dec 24 (Reuters) - U.S. stock index futures rose
on Monday, lifted by news of a deal to buy a Merrill Lynch
<MER.N> lending unit and as investors eyed retailers as the
busy holiday shopping season drew to a close.
Trading volume is expected to be light, with the U.S. stock
market closing at 1 p.m (1800 GMT) for Christmas Eve.
Merrill, which reported billions of dollars on mortgage
losses, said Monday it plans to sell most of its Chicago-based
capital lending business to General Electric Co's <GE.N>
commercial finance arm.
Merrill Lynch's new Chief Executive John Thain said the
deal will allow the brokerage to redeploy about $1.3 billion of
capital to other parts of the company. Merrill's shares rose
3.5 percent in pre-market trade.
Retailers will be in the spotlight as investors evaluate
how they fared during the holiday shopping season. A survey by
consumer marketing firm America's Research Group showed on
Sunday that U.S. retailers offering the widest discounts were
the winners of this holiday season in a challenging sales
environment.
"People may be interested in how many people went shopping
over the weekend and what that means for retailers," said Peter
Cardillo, chief market economist at Avalon Partners.
S&P 500 futures <SPc1> were up 2.60 points and were well
above fair value, a mathematical formula that evaluates pricing
by taking into account interest rates, dividends and time to
expiration on the contract.
Dow Jones industrial average futures <DJc1> rose 2 points
and Nasdaq 100 <NDc1> futures were up 0.25 points.
Cardillo said stocks were likely to hold on to Friday's
sharp gains. On Friday, stocks posted their strongest
single-day advance in three weeks as strong results from the
company behind the BlackBerry boosted technology shares while
financials rose on a report that another U.S. brokerage may get
a big foreign investment.
Shares of Teva Pharmaceuticals <TEVA.O> rose 4.4 percent to
$47.18 in pre-market trade on Monday after the drug maker
raised its 2007 profit forecast.
Alcoa Inc's <AA.N> shares may be in focus after it agreed
to sell its packaging and consumer businesses to New Zealand's
Rank Group for $2.7 billion in cash, the latest move by the
world's third-largest aluminum producer to focus on its core
business.
With just five trading sessions left in 2007, the major
U.S. stock indexes are still higher for the year -- the Dow is
up 7.9 percent, the S&P 500 is up 4.7 percent and the Nasdaq is
up 11.5 percent.
(Editing by Walker Simon)
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Keywords: MARKETS STOCKS