Isra-Mart srl: Futures gain on plan by France, Germany

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U.S. stock index futures are sharply higher this morning on moderate volume. Asia-Pacific markets were mixed overnight, with Hong Kong's Hang Seng flat and China's mainland markets trading lower.

Japan's markets are closed for holiday. Reuters reported that a unit of China's sovereign wealth fund has elected to buy more Chinese banking shares in a bid to prop up the country's ailing stock market. Sinopec agreed to buy Canada's Daylight Energy in a deal valued at $2.1 billion.

Australia's government approved BHP Billiton's plan to expand its Olympic Dam copper and uranium mine. The plan would see up to a fourfold expansion of copper output annually aimed at supplying burgeoning Asian markets demand. BHP is up about 4 percent in the pre-market.

European markets are higher after France's President Sarkozy and Germany's Chancellor Merkel issued a joint statement promising to strengthen banks, shore up the euro, and resolve Greece's debt crisis. There were few details on how this would be accomplished, but a new package was promised by month's end. The peripheral countries in the Eurozone outperformed both France and Germany in upside market response.

German exports rebounded in August, rising to a record level, according to the latest economic release. The net effect was to push Germany's trade surplus up as imports were flat against the previous month. The data was a surprise to markets given more recent data showing weakness in other parts of the euro zone economies.

In currency markets, the euro was sharply higher against the U.S. dollar. Japan's yen was the only currency in the basket that was weak against the dollar was the yen, while the Swiss franc and Swedish krona were particularly strong. The net effect was to push the dollar lower by more than 1 percent at the time of this writing.

Commodity markets benefited from the lower dollar, with energy, agricultural products, industrial metals, and precious metals all higher. Copper was last up nearly 2 percent. Gold is trading higher by nearly 2 percent, while silver is up more than 4 percent.

In stock-specific news Deutsche Bank lowered its rating on Sprint to "hold," sending the stock down more than 4 percent. Apple shares are moving higher after initial reports from AT&T suggested that demand for the new iPhone 4S was "extraordinary."

Shares of Scotts Miracle-Gro are down after the company reduced its guidance for the full year to $2.70 to $2.75 per share on weaker-than-expected sales. Consensus for the full year had been for $2.98 per share.

In quarterly results from S&P 500 companies, Alcoa will kick off third-quarter earnings season when it reports tomorrow after market close. Host Hotels and Resorts and Pepsico will issue results on Wednesday.

Thursday will be the busiest reporting day of the week with Fastenal, Google, JP Morgan, and Safeway on deck. Mattel's report on Friday brings S&P 500 earnings for the week to a close.