(By Salman - iStockAnalyst Writer)US Stock futures climbed higher on Tuesday on optimism bailout plan will be passed. Bush in his address to the nation also said that White House will talk to Congressional leaders on Tuesday. Earlier, on Monday, US lawmakers in House of Representative unexpectedly rejected the proposed $700 billion bailout plan. The rescue plan is the largest instance of government instance in recent time and is being touted as "mother of all bailouts".
At 13:24 London time, Europe's Dow Jones Stoxx 600 Index was up 1.30 points (+0.52%) to 253.73.
President Bush, who earlier expressed disappointment on defeat of bailout bill, on Tuesday, said that economic damage due to the current credit crisis will be "painful" and "long lasting". "Financial security is prime concern and Congress should take action. Bush said. "Consequences of inaction is getting worse every day “Bush continued further. He was hopeful that the plan will be passed and said “House rejection is not the end of legislation process".
Obama, the Democrat presidential candidate, also expressed his optimism "I'm confident we're going to get there," he said in Colorado. "It's going to be a little rocky. Obama said the plan "will get done.'' Obama also proposed to raise the limit on federal deposit insurance to $250,000 from $100,000.
Republican John McCain also requested lawmakers to ``go back to the drawing board'' and come up with legislation that will pass.
Chairman of the banking committee, Christopher Dodd, said senators may reconsider bill tomorrow.
Money market showed signs of further distress. Overnight borrowing costs jumped on Tuesday as U.S Congress rejected proposed $700 billion bank bailout plan. The London interbank overnight rate jumped to 6.78125% from 2.56875% Monday.
Financials gained in pre market trading. Sovereign Bancorp Inc. (SOV) jumped while JPMorgan Chase & Co. (JPM), Citigroup Inc. (C) and Goldman Sachs Group Inc (GS) also gained before the opening bell.
According to reports, Pharma major Pfizer Inc. (PFE) is expected to stop the development of heart-disease medicines. The company will refocus on more profitable areas, such as cancer, and will cut some jobs as well as research-and-development spending the report said further.
On Tuesday The Timken Co. (TKR) that raised its estimate for third-quarter earnings per share to $1.00 to $1.10 from 65 cents to 75 cents. For the full year of 2008, Timken raised its forecast to $3.30 to $3.45, excluding special items, up from its previous estimate of $2.95 to $3.10 a share. The company is maintaining its fourth-quarter earnings estimate of 52 cents to 57 cents a share, excluding special items.
On the front of economic data, Consumer Confidence for September is scheduled to be released at 10:00 ET.
European markets were trading mixed in afternoon trade. At 13:24, London time, UK FTSE rose 0.21% while German DAX and French CAC fell 0.91% and 0.06% respectively.
Among Asian stocks Nikkei 225 retreated 4% in Tokyo.
Governments of Belgium, France and Luxembourg further pumped 6.4 billion euros ($9.2 billion) into Dexia, a lender to local governments and infrastructure projects. Ireland guaranteed the deposits of institutions including Allied Irish Banks (AIB) and Bank of Ireland (IRE) for two years. Russia, South Korea and Taiwan banned short selling. Hong Kong's top financial regulator too indicated that it may warn "abusive" short selling.
At NYMEX, Crude oil for November delivery recovered as much as 3% on Tuesday. Earlier, Crude Oil plunged more than 9% on Monday.
Dollar was strong against Euro before the opening bell.
Disclosure: Author does not own any of the stocks discussed here.
