Stocks set to extend rally into new week

[October 11, 2010]  NEW YORK (AP) -- Stock futures rose modestly Monday as investors look to extend a rally that pushed the Dow Jones industrial average above 11,000 for the first time since early May.

Traders in recent days have been betting the Federal Reserve will act in the coming weeks to stimulate the economy and drive interest rates lower. The Fed could act as early as its meeting in early November to resume a program to buy Treasury bonds. Lower rates on bonds make stocks a more attractive investment.

The bond market was closed Monday for the Columbus Day holiday.

The Dow has risen five of the past six weeks and is now 1.8 percent from its highest level of the year.

Traders will get key economic reports at the end of the week, including data on inflation, retail sales and consumer sentiment, that could further sway trading. Earnings season also picks up with industry bellwethers Intel Corp., JPMorgan Chase & Co. and General Electric Co. releasing quarterly results.

No major economic or earnings reports are due out Monday.

In other corporate news, Microsoft Corp. is set to unveil its first batch of Windows Phone 7 smart phones. The move is aimed at strengthening Microsoft's position in the competitive mobile market where Apple Inc.'s iPhone, Research in Motion Ltd.'s BlackBerry and Google Inc.'s Android phone software are more popular.

Ahead of the opening bell, Dow Jones industrial average futures rose 19, or 0.2 percent, to 10,966. Standard & Poor's 500 index futures rose 2.30, or 0.2 percent, to 1,162.90, while Nasdaq 100 index futures rose 6.25, or 0.3 percent, to 2,027.00.

Microsoft shares rose 14 cents to $24.71 in pre-opening trading. Apple dipped 27 cents to $293.80, while Research in Motion slid 36 cents to $49.00.

The dollar rose Monday against the euro and Japan's yen. It had been falling consistently in recent weeks against those two currencies. Lower interest rates on American bonds would make it less attractive for foreign investors to hold the dollar.

Also, many countries have been actively trying to reduce the value of their currencies to make goods exported from their countries cheaper in the international marketplace. A weekend meeting of the International Monetary Fund and Group of 20 finance ministers did not yield any new agreements over the recent currency moves.

Overseas, Britain's FTSE 100 rose 0.2 percent, Germany's DAX index gained 02 percent, and France's CAC-40 rose 0.2 percent.

[Associated Press; By STEPHEN BERNARD]

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