Stock futures point to higher open after Crimea vote
NEW YORK (Reuters) - U.S. stock index futures pointed to a sharply higher open on Wall Street Monday, rebounding from a steep drop in the previous week, after Sunday's referendum over whether Crimea will join Russia passed without violence.
While markets are seen as vulnerable to further developments in what is considered the biggest crisis between Russia and the United States since the Cold War, anticipated sanctions against Russia have yet to materialize.
The 97-percent vote in Crimea in favor of quitting Ukraine was condemned as illegal by Kiev and the West, with the White House calling Russian actions "dangerous and destabilizing.
The geopolitical tension weighed on equities last week, with the S&P 500 suffering its biggest weekly loss in seven. The benchmark index closed below a key technical support level of 1,850 for a second straight day on Friday, and is now down 2 percent from its all-time closing high.
In a sign of investor anxiety, the CBOE Volatility index jumped to its highest since early February on Friday, though the so-called "fear index" remained at historically low levels.
S&P 500 futures rose 7.8 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 67 points and Nasdaq 100 futures rose 18.5 points.
Markets have not undergone a sustained pullback in more than a year, with investors using periods of market weakness as buying opportunities. The U.S. Federal Reserve's massive stimulus program has helped keep a floor under equity prices, and market participants are looking ahead to a two-day meeting of the Fed's policy-setting committee, which begins Tuesday.
The Fed is unlikely to deviate from previously announced policies, but it could use the meeting - the first with Janet Yellen as chair - to map out its plan for rate rises, whether in the formal statement it issues afterward or at Yellen's news conference. The central bank has said that the first rate rise is likely to come around the middle of next year, as long as the U.S. economy keeps healing.
In the latest economic data, the New York Fed's "Empire State" gauge of New York manufacturing rose in March, helped by increases in new orders and inventories, though the rise was less than forecast.
In company news, Chinese e-commerce giant Alibaba Group Holding Ltd said on Sunday it would begin the process towards a U.S. initial public offering, ending months of speculation.
JA Solar Holdings Co shares jumped 14 percent to $13.05 in premarket trading after the company posted its first profit in 10 quarters and forecast higher shipments for the year.
Intercept Pharmaceuticals Inc on Sunday said its experimental liver disease drug was effective in a third late-stage clinical trial, setting the stage for the company to file for marketing approval. Shares fell 5.9 percent to $435 in premarket trading.
Giant Investment Ltd will acquire Chinese online gaming company Giant Interactive Group Inc for $3 billion and take it private, the companies said on Sunday.
(Editing by Bernadette Baum)