Stock futures pointing toward modestly higher open

[December 21, 2009]  NEW YORK (AP) -- Stock futures are pointing to a higher opening Monday, following gains in major markets overseas in what is expected to be a quiet week of trading.

Trading is likely to be light during the Christmas holiday-shortened week, but that can add to volatility. Markets will be closed Friday.

Investors traditionally avoid placing big bets during the last two weeks of the year. Traders are likely to be closing out books and locking in gains from a nine-month rally. Major indexes are all sharply higher in 2009.

Those still trading will get plenty of economic data throughout the week to determine if the ongoing rally has been justified.

The government on Tuesday releases its final report on third-quarter gross domestic product, which measures the total economic output of the country. Economists polled by Thomson Reuters predict third-quarter growth was unchanged at an annual rate of 2.8 percent.

Data on existing and new home sales are also due out later in the week. Both reports are expected to show sales rose about 2 percent in November. A recovery in the housing market is considered vital to foster a recovery because a collapse in sales and prices coupled with mounting mortgage defaults helped throw the nation's economy into recession.

Orders to U.S. factories for big-ticket manufactured goods likely rebounded in November. Orders for durable goods that are expected to last more than three years likely rose 0.5 percent in November, after a 0.6 percent drop a month earlier. The report is due out Thursday.

Ahead of the opening bell, Dow Jones industrial average futures rose 26, or 0.3 percent, to 10,359. Standard & Poor's 500 index futures increased 4.20, or 0.4 percent, to 1,101.90, while Nasdaq 100 index futures rose 6.00, or 0.3 percent, to 1,813.00.

Stocks are looking to extend gains into a second day. Major indexes rose Friday following upbeat earnings reports from software company Oracle Corp. and BlackBerry maker Research In Motion Ltd.

Volume was exceptionally high Friday as several types of options contracts expired and S&P made changes to the S&P 500. That index is the basis for many indexed mutual funds, so those funds were forced to alter their holdings to match the reconstituted index.

Meanwhile, bond prices fell Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.58 percent from 3.54 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.05 percent from 0.03 percent.

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

Overseas, Japan's Nikkei stock average rose 0.4 percent. Britain's FTSE 100 rose 0.9 percent, Germany's DAX index gained 0.7 percent, and France's CAC-40 rose 0.7 percent.

[Associated Press; By STEPHEN BERNARD]

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