Stocks poised higher ahead of new home sales data

[August 26, 2008]  NEW YORK (AP) -- Wall Street headed for a higher open Tuesday, a day after a big pullback, as investors awaited key readings on new home sales and consumer confidence.

Investors expect the Commerce Department report to show new home sales dropped again in July, falling nearly 1 percent to a seasonally adjusted annual rate of 525,000 from June's 530,000, according to analysts surveyed by Thomson/IFR. That would be the eighth decline in the past nine months. The report is due at 10 a.m. EDT.

Reducing the inventory of new homes has been difficult as mortgage rates have increased and banks have tightened lending standards due to the credit crunch.

Also Tuesday, Standard & Poor's/Case-Shiller release their June home price index.

The market is also awaiting a report on U.S. consumer sentiment. The Conference Board's Consumer Confidence Index is expected to rise slightly for August to 52.4, just higher than last month's reading of 51.9, according to economists surveyed by Thomson/IFR. That would be the second straight month the index posted a slight gain, but the forecast still remains about half of what it was a year ago.

Investors closely watch for any sign that consumers' moods are lifting as consumer spending accounts for two-thirds of the U.S. economy.

The Dow Jones industrial average futures rose 16, or 0.14 percent, to 11,400. On Monday, the Dow fell almost 250 points as worries about American International Group Inc. fed concerns that the deterioration of the credit markets will bring more big losses for financial companies.

The Standard & Poor's 500 index futures rose 1.80, or 0.14 percent, to 1,268.20, and the Nasdaq 100 index futures rose 3.75, or 0.20 percent, to 1,898.75.

Bonds rose. The yield on the benchmark 10-year Treasury note, which trades opposite its price, fell to 3.78 percent from 3.79 percent late Monday. The dollar was higher against other major currencies, while gold prices fell.

Light, sweet crude fell $1.82 to $113.29 in premarket electronic trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average fell 0.78 percent. In afternoon trading, Britain's FTSE 100 was down 1.98 percent, Germany's DAX index was down 0.18 percent, and France's CAC-40 was down 0.95 percent.

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On the Net:

New York Stock Exchange: http://www.nyse.com/

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[Associated Press; By STEVENSON JACOBS]

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