US pre-open: Stock futures rally ahead of Yellen speech

Yellen will speak in Washington at 08:30 local time amid speculation over the first interest rate hike.

The Federal Open Market Committee is weighing economic data as it considers when to raise rates after ending its bond buying programme at its last meeting.

Fed official Richard Fisher is also due to speak in Washington.

Elsewhere in the US, data may show construction spending rose 0.6% in October following a 0.4% decline a month earlier, according to analysts’ estimates.

Meanwhile, hopes that the European Central Bank (ECB) may introduce full-blown quantitative easing soon were raised after President Mario Draghi said he would consider buying government bonds if inflation remains dangerously low for too long.

Bets on the prospect for further stimulus in China had also grown following the release of weak economic data, including a slowdown in manufacturing activity.

In another lift to stocks, West Texas Intermediate crude rebounded after reaching new lows following OPEC’s decision last week to not cut oil production to address falling prices.

Fiat Chrysler Automobiles NV jumped after Transport Ministry data showed a 5.9% rise in car sales in November in Italy.

Avanir Pharmaceuticals rose after Japan’s Otsuka Holdings Co. agreed to buy the Aliso Viejo, California-based drugmaker for about $3.54bn.

Royal Caribbean Cruises rallied on reports the cruise company will replace Bemis Co. in the S&P 500.