US stocks head for higher open as oil prices slip

[July 30, 2008]  NEW YORK (AP) -- U.S. stocks headed for a moderately higher open Wednesday a day after a whiplash rally left investors awaiting fresh economic and corporate reports to determine whether the run-up will continue.

Wall Street is expecting quarterly reports from names such as Office Depot Inc. and Starbucks Corp. And reports are due Thursday and Friday on the gross domestic product and July employment. Some investors could refrain from making big bets ahead of the key economic barometers.

Beyond economic readings, investors will continue to watch oil after it hit a two-month low Tuesday and led to the rally that more than made up for a sharp pullback in stocks Monday. Light, sweet crude fell 61 cents to $121.58 in premarket electronic trading on the New York Mercantile Exchange. A weekly Energy Department report is due Wednesday that should offer insights into domestic demand for energy.

Dow Jones industrial average futures rose 35, or 0.31 percent, to 11,408. Standard & Poor's 500 index futures rose 1.20, or 0.10 percent, to 1,262.90, and Nasdaq 100 index futures rose 9.25, or 0.50 percent, to 1,851.25.

Bond prices slipped. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.05 percent from 4.04 percent late Tuesday.

The dollar was mixed against other major currencies, while gold prices fell.

Investors will continue to see restrictions on a type of trade that can exacerbate a stock's decline. The Securities and Exchange Commission on Tuesday extended a temporary restriction on short-selling of the stocks of mortgage finance companies Fannie Mae, Freddie Mac and 17 big investment banks. The SEC said the ban on "naked" short selling will go through Aug. 12 and won't be extended.

Short sellers used borrowed shares and profit by correctly betting that they will fall. "Naked" short sellers, however, don't borrow shares before they sell them and try to cover their moves after they've placed their bets.

The cap, put in place on July 15 after a sharp drop in shares of Fannie Mae and Freddie Mac, helped calm the markets and helped drive a short-lived but substantial run-up in shares of financial companies.

In corporate news, Comcast Corp. said Wednesday its second-quarter profit rose 8 percent as cable TV rates rose and consumers ordered more digital and premium services. The results fell short of Wall Street's forecast.

Overseas, Japan's Nikkei stock average rose 1.58 percent. In morning trading, Britain's FTSE 100 rose 1.43 percent, Germany's DAX index advanced 0.88 percent, and France's CAC-40 rose 1.18 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 TIM PARADIS]

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