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 Trading is expected to be light because of Veterans Day, with the government bond markets closed. This also could lead to higher volatility as institutional traders take positions ahead of economic reports later in the week.
However, futures dropped sharply at about 7:30 a.m. EDT after reports of a fire, and possible explosion, in East London that sent a plume of smoke over the city. Futures began to recover on suggestions the incident was likely not related to terrorism.
Financial services stocks were one sector leading futures higher. The group suffered sharp declines last week after Bank of America Corp., JPMorgan Chase & Co., and Wachovia Corp. all warned of fourth-quarter writedowns from their subprime mortgage portfolios.
Discount brokerage E-Trade Financial Corp. said late Friday it expects to record further writedowns on its $3 billion in mortgage-backed securities during the quarter. Meanwhile, troubled home lender Countrywide Financial Corp. said in a U.S. regulatory filing it could be "severely" limited if its credit rating drops into junk status.
But that doesn't quell fear that another major bank might warn of losses.
Britain's HSBC Holdings PLC was seen as the next major financial institution to write down losses from exposure to the debt markets, according to a report from The Times of London. The bank will announce a $1 billion charge to its portfolio of high-risk subprime mortgages when it reports third-quarter results from its U.S. division, according to the report.
These worries could extend losses on the Dow Jones industrial average, which fell 4.06 percent last week. It was the blue chip index's second-straight week in the red as the credit market slump shows no sign of abating.
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 Dow futures fell 6.00, or 0.09 percent, to 13,041, while Standard & Poor's 500 futures added 1.20, or 0.08 percent, to 1,456.10. Nasdaq 100 index futures added 2.50, or 0.12 percent, to 2,044.25.
Oil prices fell $1.48 to $95.43 in premarket trading on the New York Mercantile Exchange. The drop came on reports that OPEC would discuss increasing its output at an upcoming meeting in a bid to cool record crude prices.
There's little in the way of economic news on Monday. Investors will be looking to reports later in the week on the core Producer Price index and the core Consumer Price Index.
Hershey Co. will be under pressure Monday after eight board members resigned and are being replaced with eight new members picked by the charitable trust that controls the company. The announcement was made by the company late Sunday.
Meanwhile, Tyson Foods will post its quarterly results on Monday.
Overseas, Japan's Nikkei stock average closed down 2.48 percent and Hong Kong's Hang Seng index dropped 3.88 percent. In afternoon trading in Europe, Britain's FTSE 100 rose 0.11 percent, Germany's DAX index fell 0.52 percent, while France's CAC-40 shed 0.42 percent.
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On the Net:
New York Stock Exchange: http://www.nyse.com/
Nasdaq Stock Market: http://www.nasdaq.com/
[Associated Press; By JOE BEL BRUNO]
Copyright 2007 The Associated Press. All rights reserved. This
material may not be published, broadcast, rewritten or
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