Wall Street set for modestly higher opening

[May 12, 2009]  NEW YORK (AP) -- Wall Street is set for a modestly higher open Tuesday, looking to bounce back and extend its recent two-month rally. Stock futures moved higher.

With little economic data and few earnings reports due out, investors will likely shift attention to the government's upcoming reports on retail sales and inflation later in the week. Fresh data on the nation's March trade balance is scheduled to be released Tuesday morning.

Consumer spending accounts for more than two-thirds of U.S. economic activity so investors will be eager for forecasts from retailers for guidance on whether the economy is stabilizing as many traders have been betting the past two months.

Ahead of the opening bell, Dow Jones industrial average futures rose 15, or 0.18 percent, to 8,417. Standard & Poor's 500 index futures rose 0.90, or 0.10 percent, to 909.90, while Nasdaq 100 index futures rose 1.00, or 0.07 percent, to 1,397.75.

The market retreated Monday from its two-month rally, as financial stocks moved lower. During the rally that started in early March, financial stocks had been one of the key drivers of the market's surge.

Four banks announced plans Monday to raise new capital by selling common stock. While that is a welcome sign that banks can again turn to Wall Street to raise money instead of going to the government, the reality of extra shares pouring into the market weighed on financial stocks.

The Dow fell 155.88, or 1.8 percent, to 8,418.77 on Monday. The S&P 500 declined 19.99, or 2.2 percent, to 909.24, while the tech-focused Nasdaq fell 7.76, or 0.5 percent, to 1,731.24.

Speaking Monday night at a conference, Federal Reserve chairman Ben Bernanke said initial indications from the government's bank stress-test results were encouraging, and provide reassurances about the health of the nation's largest financial firms.

Also, investors will have a chance to snap up new shares of Ford Motor Co., which announced plans to raise new cash through a common stock offering. Unlike General Motors Corp. and Chrysler LLC, Ford has been able to avoid needing government aid amid a sharp downturn in auto sales. Chrysler has filed for bankruptcy protection and GM is working on turnaround plans to help it avoid bankruptcy.

Meanwhile, bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.19 percent from 3.17 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.18 percent from 0.17 percent late Monday.

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

Overseas, Japan's Nikkei stock average fell 1.6 percent. In afternoon trading, Britain's FTSE 100 fell 0.2 percent, Germany's DAX index rose 0.5 percent, and France's CAC-40 declined 0.5 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 STEPHEN BERNARD]

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