Stock futures climb in advance of market opening; UBS and Lehman Brothers to issue new stock

Wall Street appeared poised for a opening rally Tuesday as investors warmed to new recapitalization plans at UBS AG and Lehman Brothers Holdings Inc.

Swiss bank UBS said Tuesday it will take a fresh $19 billion (euro12 billion) write-down due to additional declines in the value of its mortgage assets and other credit instruments, following an $18 billion (euro11.4 billion) write-down last year. But investors focused instead on UBS' accompanying announcement that it will issue up to $15 billion (euro9.5 billion) in new stock and that Chairman Marcel Ospel had quit. The new stock sale and executive change were seen as signs the bank was moving forward despite being the most serious European victim of the U.S. subprime mortgage problems.

In addition, the U.S. investment bank Lehman Brothers said it would sell 3 million convertible preferred shares due to "investor interest."

That news buttressed the view that financial services companies are taking aggressive action to improve their capital bases and should add to early positive momentum Tuesday as the second quarter gets under way. And in European trade shares of Deutsche Bank AG advanced, despite news that the company expects a $4 billion (euro2.53 billion) first-quarter writedown for difficult market conditions.

In addition, the dollar was able to take back some strength against the euro in early trade. The euro bought $1.5636 early Tuesday, down from the $1.5785 late Monday in New York.

The futures contract for the Dow Jones industrial average rose 87 points, or 08 percent, to 12,344. Futures contracts for the Standard & Poor's 500 shot up 11.80 points, or 0.8 percent, to 1,335.80 and the Nasdaq 100 advanced 19.5 points, or 1.1 percent, to 1,810.

On Monday, Wall Street managed a moderate gain in the final session of a dismal first quarter. But stock prices and the major indexes still ended the first three months of 2008 with massive losses, the casualties of the still continuing credit crisis. It was the worst quarter for the major indexes since the third quarter of 2002, when Wall Street was approaching the lowest point of a protracted bear market.

The Institute for Supply Management is expected to report that manufacturing activity contracted further in March. Analysts polled by Thomson/IFR project that the ISM manufacturing composite index slipped to 48.0 from 48.3 in February. All readings below 50 indicate contraction.

In addition, the Commerce Department is expected to report that construction spending in February declined 1.1 percent, which would be a slight improvement over the 1.7 percent drop seen in January, according to Thomson/IFR.

Both reports are due at 10 a.m. EST (1400 GMT).

U.S. auto makers also are set to release their March sales figures.