March 10 (Bloomberg) -- U.S. stock-index futures advanced on speculation the Federal Reserve will accelerate interest-rate cuts to prop up the world's largest economy.

Citigroup Inc. and Caterpillar Inc. advanced after Goldman Sachs Group Inc. said the central bank may take a ``more aggressive stance'' following the fastest loss of American jobs in five years. McDonald's Corp. climbed after same-store sales surged 12 percent last month. Shares in Europe pared their declines. Futures pared gains after Blackstone Group LP, manager of the world's biggest leveraged-buyout fund, posted earnings that trailed analysts' estimates.

Standard & Poor's 500 Indexfutures expiring in March added 0.8 point to 1,293.6 at 8:50 a.m. in New York, paring a gain of 6.7 points. Dow Jones Industrial Average futures climbed 15 points to 11,906. Nasdaq-100 Index futures added 0.5 point to 1,709.25.

``The Fed is trying to get the market's attention that it is in fact doing something,'' Alan Gayle, who helps oversee $17 billion of equities at Trusco Capital Management in Richmond, Virginia, said in an interview with Bloomberg Television. ``So far the Fed's been easing and that's great. We think that's going to pay dividends down the road.''

Citigroup, the biggest U.S. bank by assets, added 0.6 percent to $21.03. Caterpillar, the world's largest maker of bulldozers and excavators, rose 0.3 percent to $70.08.

Fed Bets

Traders now see a 98 percent chance that the central bank cut the target for overnight loans between banks to 2.25 percent this month from the current 3 percent, according to futures on the Chicago Board of Trade. That's up from a 74 percent chance last week. They also now say it's possible the Fed may cut by as much a 1 percentage point, a possibility they hadn't expected one week ago.

While the likeliest outcome is that the Fed waits until its next scheduled meeting on March 18 to reduce borrowing costs, a half percentage point cut in the target for the overnight lending rate between banks today can't be ruled out, Goldman economists Edward McKelvey and Jan Hatzius wrote in a research note.

McDonald's climbed $2.23, or 4.3 percent, to $54.50. The world's largest restaurant company said Europe and Asia spurred the sales increase. U.S. same-store sales rose 8.3 percent, exceeding the 7.3 percent median analyst estimate in a Bloomberg survey.

Blackstone

Blackstone lost 23 cents to $14.35. The company posted a net loss of $170 million in the fourth quarter because of compensation costs tied to its initial public offering in June. Profit excluding compensation costs was 8 cents a share, falling short of the average estimate of 20 cents by seven analysts in a Bloomberg survey.

The S&P 500 last week fell to the lowest since 2006 after record home foreclosures and an unexpected drop in payrolls heightened concern the economy is in a recession.

The benchmark for American equities has retreated 12 percent this year on concern the collapse of subprime mortgages will snuff out earnings growth. Profits for S&P 500 companies are expected to shrink this quarter and next, according to analysts' estimates compiled by Bloomberg.

To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net.

Last Updated: March 10, 2008 08:53 EDT