US stock futures rise on Europe debt plan

US stock futures rose, indicating the Standard & Poor\'s 500 Index may extend a weekly gain, amid reports that European officials have a plan to recapitalise struggling banks and Morgan Stanley\'s earnings beat estimates. Morgan Stanley jumped 5.2 per cent after the world\'s largest brokerage posted a smaller-than-estimated loss as trading revenue increased from the first quarter. Medco Health Solutions Inc surged 21 per cent after Express Scripts Inc agreed to buy the pharmacy-benefits manager for $29.1 billion. AT&T Inc rose 0.2 per cent after reporting sales that topped estimates. S&P 500 futures expiring in September rose 0.6 per cent to 1,329 at 9:19am in New York. Dow Jones Industrial Average futures climbed 64 points, or 0.5 per cent, to 12,571. Article continues below \"The market\'s dealing with two big things right now: earnings coming out from US companies and then the macro picture of financial turmoil both in the US and Europe,\" Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, which manages $1.2 billion, said in a telephone interview. \"We seem to be close to getting some kind of budget deal in the US and it looks like they\'re going to do something in Europe yesterday, there\'s a resolution draft and that\'s good.\" Equities erased earlier losses as Reuters reported that a draft EU document called for a Greek \"Marshall Plan\" that includes an extension of bailout funds to Greece and the possible purchase of bonds in secondary markets to halt a surge in yields that has raised borrowing costs for the most-indebted nations. The S&P 500 had its biggest rally since March on Tuesday as President Barack Obama endorsed a bipartisan deficit-reduction plan from the so-called Gang of Six senators. The index declined 2.8 per cent from a three-year high in April through yesterday amid speculation the sovereign debt crisis in Europe is spreading across the region and concern US lawmakers will fail to reach a deal on raising the debt limit before the August 2 deadline, pushing the government of the world\'s largest economy closer to default. Thirty-five companies in the gauge are due to release results late last night. Of the 98 S&P 500 companies that have reported earnings since July 11, 85 per cent have exceeded analyst estimates, according to Bloomberg data. Stock futures maintained gains after a report said more Americans than forecast filed claims for unemployment benefits last week, reflecting the volatility of applications during the annual auto-plant retooling period. Applications for jobless benefits increased 10,000 in the week ended July 16 to 418,000, Labour Department figures showed yesterday. The index of US leading indicators probably rose at a slower pace in June, signalling the recovery will be restrained in the second half of the year, economists forecast a report that fell short of some analysts\' predictions.