Wall Street looks to hold on to massive gains

[June 02, 2009]  NEW YORK (AP) -- Wall Street is looking to hold on to its massive gains Tuesday, hoping for positive news on the housing industry.

Stock futures are roughly flat in early morning trading as investors await the National Association of Realtors' index on pending home sales for April, to be released at 10 a.m. Eastern time.

Analysts are expecting the index to have risen slightly -- another sign that U.S. home sales are starting to rebound after plunging earlier this year.

Later Tuesday, after the market close, homebuilder Hovnanian Enterprises will report second-quarter results.

Stocks around the world soared Monday on better-than-expected readings on manufacturing, consumer spending and construction spending. The Dow Jones industrial average and other major indexes rose more than 2 percent. Both the Standard & Poor's 500 and Nasdaq composite indexes rose to their highest levels this year.

Investors have been encouraged this spring by data suggesting the economy's slide is slowing, sending stocks up more than 30 percent from 12-year lows in early March. The market has been able to look past such unnerving events as the bankruptcy filings of the nation's two largest automakers, as well as dismal reports on the labor market.

Analysts warn that some pullback is necessary for the market to maintain a solid, healthy advance, noting that volatility will likely be the norm for some time. This week investors will be closely watching a spate of economic reports -- particularly the crucial monthly jobs data on Friday -- for more signals on where to take the market next.

Ahead of the market's open, Dow Jones industrial average futures rose 10, or 0.1 percent, to 8,698. Standard & Poor's 500 index futures added 2.10, or 0.2 percent, to 941.20, while Nasdaq 100 index futures gained 3.75, or 0.3 percent, to 1,473.75.

Financial stocks will likely be in focus Tuesday after JPMorgan Chase & Co. and American Express Co. became the latest banks to announce stock offerings in an effort to repay federal bailout funds. JPMorgan said late Monday it plans to raise $5 billion to help repay a $25 billion government loan, while American Express is seeking to raise $500 million to help pay back part of its $3.4 billion in rescue funds.

Meanwhile, Goldman Sachs Group Inc. has sold part of its stake in Industrial & Commercial Bank of China to raise more than $1.9 billion to help repay bailout money.

Banks not required by the government to raise additional capital that want to repay bailout funds must first prove they can raise money without relying on guarantees against losses provided by the Federal Deposit Insurance Corp.

Just a day after General Motors Corp. filed for bankruptcy protection, the automaker says it has entered an agreement to sell its Hummer brand, which would likely save more than 3,000 U.S. jobs. Major automakers will report U.S. auto sales for May on Tuesday.

Government bonds rose early Tuesday. The yield on the 10-year Treasury note, used as a benchmark for home mortgages and other consumer loans, slipped to 3.64 percent from 3.68 percent late Monday.

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

Light, sweet crude dipped 57 cents to $68.01 in electronic trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average rose 0.3 percent, while European indexes were mostly lower. Britain's FTSE 100 was down 0.7 percent, Germany's DAX index was up 0.2 percent, and France's CAC-40 was down 0.3 percent.

[Associated Press; By SARA LEPRO]

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