Stocks set to rise on easing European debt worries - BusinessWeek

By CHIP CUTTER

NEW YORK

Stocks are headed higher as investors shake off worries about the European debt crisis.

Portugal had a relatively successful bond auction Wednesday, and that eased concerns that the country will soon need a financial bailout. European stocks rose broadly.

Traders were relieved that the country ended up paying a lower interest rate for its long-term debt than previously expected. But analysts cautioned that Portugal could still need a financial rescue if it slips back into a recession later this year.

"Things are not resolved completely here," said Rob Lutts, president and chief investment officer of Cabot Money Management. He said it's "just a temporary sigh of (relief)."

Ahead of the opening bell, Dow Jones industrial average futures are up 69 points, or 0.6 percent, at 11,685. Standard & Poor's 500 futures are up 9, or 0.7 percent, at 1,280. Nasdaq 100 index futures are up 15, or 0.7 percent, at 2,300.

Bond prices fell, pushing their yields higher. The yield on the 10-year Treasury note, which moves opposite its price, rose to 3.40 percent from 3.34 percent late Tuesday.

The dollar fell 0.1 percent against an index of six other currencies.

U.S. investors will get a report on the domestic economy later in the day when the Federal Reserve releases an update on economic conditions in 12 regions of the country. Analysts expect it to show some signs of an economic recovery.

In corporate news, ITT Corp. rose 22.7 percent to $64.74 in pre-market trading after the defense contractor said it would split itself into three publicly traded companies. ITT plans to separate its defense and information business, its water technology unit and its industrial products business.

American International Group Inc. rose 1.6 percent to $59.97 in pre-market trading after the company agreed to sell its stake in Taiwan's third-largest insurer for $2.16 billion. The deal is part of AIG's plan to raise money to repay the $182 billion it received in government bailout funds.

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