u.s. stock-index futures rise

U.S. Stock-Index Futures Rise; Lucent and GM Advance in Europe
April 3 (Bloomberg) --

U.S. stock-index futures climbed, indicating markets may rebound from a two-week drop amid speculation that earnings will keep rising and takeovers will gather pace.

Lucent Technologies Inc. rose in Europe after it agreed to be bought by Alcatel SA in a $13.4 billion share swap. General Motors Corp. gained as people familiar with the matter said the company may today say it's selling control of its finance unit.

Aztar Corp. may be active after the casino company received a takeover bid. Exxon Mobil Corp. advanced with oil prices.

``Declines over recent weeks are overdone,'' said Alison Sinclair, who helps oversee $800 million at Britannic Asset Management in Glasgow, Scotland. ``We're going to see a lot more merger and acquisition activity. The U.S. economy is ticking along quite nicely and that will feed through to earnings.''

Standard & Poor's 500 Index futures expiring in June added 7.8 to 1311.1 at 11:46 a.m. in London. Dow Jones Industrial Average futures gained 39 to 11,234 and Nasdaq-100 Index futures rose 10 to 1730.

Reports today may show accelerating manufacturing and construction spending, according to economists surveyed by Bloomberg.

The S&P 500 ended March with its biggest first-quarter gain in seven years. The measure still had its second straight weekly drop on speculation the year's rally will stall as interest-rate increases by the Federal Reserve constrain profit growth.

Alcatel-Lucent

Alcatel's acquisition of Lucent brings the total value of announced deals for the year to $883.5 billion. That's a 54 percent increase from a year ago. The first quarter of 2006 was the busiest for takeovers since the record M&A year of 2000.

Lucent, the biggest U.S. maker of phone equipment, added 5 cents to $3.10. France's Alcatel will acquire Lucent to create a company with about $25 billion in sales, which would rival Cisco Systems Inc. for the top spot in the total phone and computer- network equipment market.

The companies said they plan to cut about 10 percent of their joint workforce, or 8,800 jobs, to achieve savings of 1.4 billion euros ($1.7 billion) within three years. Alcatel shares gained 6 percent in Paris.

``What is satisfying the market is the synergies,'' said Salah Seddik, a fund manager at Richelieu Finance in Paris, which oversees about $4.7 billion. ``We'll see a lot of savings. The group will be positioned in very profitable sectors.''

Ameristar Casinos Inc., the owner of seven U.S. casinos, offered to buy Aztar for $42 a share, one cent above Aztar's close last week.

The offer values the Phoenix-based company at $2.25 billion and creates a three-way bidding contest with Colony Capital LLC and Pinnacle Entertainment Corp. None of the companies' shares traded in Europe.

GM Sale

General Motors, the world's largest automaker, rose 24 cents to $21.51. The company may say it's agreed to sell control of General Motors Acceptance Corp. to a group led by Cerberus Capital Management LP, people with direct knowledge of the matter said. An announcement may come as early as this morning, New York time.

``The sale will definitely boost GM shares as it will help reduce debt,'' said Jordi Padilla, equities director at Atlas Capital in Madrid, which manages about $1.2 billion.

Exxon added 43 cents to $61.29 and Chevron Corp. gained 30 cents to $58.27 in Germany. Oil climbed in New York on concern Iran will cut supplies as the nation's dispute with the U.S. over its nuclear program escalates.

Conoco, Microsoft

ConocoPhillips jumped 76 cents to $63.91. Shares of the largest U.S. oil refiner were rated ``overweight'' in resumed coverage by analysts at Morgan Stanley. ``Conoco has rarely been this inexpensive'' in the past decade, the analysts wrote in a note to investors.

Microsoft Corp., the world's largest software maker, advanced 16 cents to $27.37 in Germany. Barron's said earnings may rise as much as 59 cents a share in the next three years as the company introduces new operating-system, word-processing and e-mail software. Barron's cited Rick Sherlund, an analyst at Goldman Sachs & Co.

Johnson & Johnson fell 17 cents to $59.05 in Germany. The maker of medical devices, pharmaceuticals and consumer goods recalled about 4 percent of batches of a chemical used in laboratory diagnostic tests.

ADM, Sirius

Archer-Daniels-Midland Co. added 30 cents to $33.95. The largest U.S. producer of ethanol may see its share price surge as much as 30 percent within a year as demand for the corn-based alternative fuel rises, Barron's said.

Sirius Satellite Radio Inc. added 2 cents to $5.09. The second biggest U.S. pay-radio station will have positive cash flow when it reaches $1 billion in revenue in 2007, Chief Executive Officer Mel Karmazin said in the Wall Street Journal.

International Game Technology, the No. 1 maker of slot machines, added 98 cents to $36.28 in Germany. The stock was raised to ``buy'' from ``neutral'' by Merrill Lynch & Co.

Seitel Inc. rose 37 cents to $3.56. The collector of oil and gas seismic data was recommended by CNBC host Jim Cramer, who said the company will benefit as oil exploration expands.

Economic data today may show that U.S. manufacturing accelerated for the second straight month in March, with the Institute for Supply Management's factory index rising to 57.5 from 56.7 the month before, according to the median estimate of economists surveyed by Bloomberg News. Readings of more than 50 indicate growth.

The Commerce Department will say construction spending in the U.S increased 0.5 percent in February, according to economists. In January, the Commerce Department said spending rose 0.2 percent, the weakest in seven months.

Contracts to purchase previously owned U.S. homes likely fell a sixth straight month in February, declining 0.5 percent, economists said before a National Association of Realtors report.

On March 31, the Dow average slid 0.6 percent to 11,150.70. The S&P 500 declined 0.2 percent to 1300.25. The Nasdaq Composite Index added 0.1 percent to 2340.82.