U.S. futures higher, focus on budget talks; Dow Jones up 0.15%

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Investing.com - U.S. stock futures pointed to a higher open on Monday, as investors awaited the outcome of final U.S. budget negotiations, with hopes lawmakers will manage to hammer out a deal before the end of the day.

Ahead of the open, the Dow Jones Industrial Average futures pointed to a 0.15% rise, S&P 500 futures signaled a 0.27% increase, while the Nasdaq 100 futures indicated a 0.09% gain.

Trading volumes were expected to remain thin as many investors already closed books to lock in profit before the end of the year, reducing liquidity in the market and increasing the volatility.

Market players remained focused on developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1 unless Democrats and Republicans agree how to cut the deficit.

U.S. President Barack Obama met with congressional leaders at the White House Friday afternoon, but both sides failed to reach an agreement ahead of the looming year-end deadline.

Senate Majority Leader Harry Reid said the Senate would resume sitting on Monday to continue discussions, but there were still significant differences between the two sides.

President Obama told NBC's "Meet the Press" on Sunday that investors could begin to show greater concerns in the new year. "If people start seeing that on January 1st this problem still hasn't been solved... then obviously that's going to have an adverse reaction in the markets," he said.

Stocks closed lower on Friday, as prospects for a deal worsened at the beginning of the weekend.

Carlyle Group was expected to be active later Monday, as the global asset management firm and investors including Swiss bank Pictet & Cie agreed to buy investment-banking firm Duff & Phelps Corp. for USD665.5 million.

Also in company news, the Richline Group, Inc., a unit of Berkshire Hathaway, said it bought Rio Grande, including the firm's Neutec branded equipment, from The Bell Group. The deal will reportedly take effect as of January 1.

Elsewhere, Bloomberg reported that Tribune Co., owner of the Chicago Tribune, Los Angeles Times and six other daily papers, is exiting bankruptcy, four years after a leveraged buyout by billionaire Sam Zell led to Chapter 11 proceedings.

Across the Atlantic, European stock markets were mixed. France's CAC 40 rose 0.35% and Britain's FTSE 100 dropped 0.52% higher, while the EURO STOXX 50 and Germany's DAX remained closed for New Years's Eve.

During the Asian trading session, Hong Kong's Hang Seng Index dipped 0.04%, while Japan's Nikkei 225 Index climbed 0.70%.

Also Monday, a report from HSBC released earlier confirmed that manufacturing activity in China expanded at the fastest pace since May 2011 in December. The final version of China's HSBC Purchasing Managers Index rose to 51.5 in December from a final reading of 50.5 in November.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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