Wall Street Heads for Gains at Opening

[February 26, 2008]  NEW YORK (AP) -- Wall Street was poised to open mildly higher Tuesday following the previous session's rally inspired by optimism about the health of ailing bond insurers.

But investors also will be mindful of a new warning from retailer Home Depot Corp that it expects sales to decline up to 5 percent this year as it contends with a slowing housing market. Another closely watched retailer, Target Corp., is set to release quarterly earnings.

Stocks Monday rallied after ratings agency Standard & Poor's affirmed investment grade "AAA" ratings for bond insurers Ambac Financial Group Inc and MBIA Inc. Market sentiment in recent sessions has been influenced to a large degree by the plight of the insurers who appear undercapitalized and could have trouble paying back bond holders if default levels are too high.

But the market has gotten a lift whenever it appeared that the insurers will receive necessary capital injections to retain top ratings and continue to back municipal debt deals. Optimism that a rescue appears near could spill over into Tuesday's opening.

The futures contract for the Dow Jones industrial average rose 3 points to 12,569. The futures contract for the Standard & Poor's 500 advanced 1.1 point, or 0.1 percent, to 1,372.70 and the Nasdaq 100 futures contract rose 8 points, or 0.4 percent, to 1,793.5.

There are data reports on tap Tuesday, including wholesale inflation figures for last month and this month's consumer confidence report from the Conference Board.

Thomson/IFR is projecting that producer prices rose 1.1 percent in January, which would contrast with a decline of 0.1 percent in December. Core prices, which remove volatile food and energy figures, are expected to show a rise of 0.3 percent, up from a 0.2 percent gain the day before.

Investors in recent sessions have been concerned that inflation appears to be on the rise.

The February consumer confidence report is projected by Thomson/IFR to drop to 83 this month from 87.9 in January.

In overseas trade, Tokyo's Nikkei fell 0.65 percent. But there were gains on European bourses. London's FTSE 100 rose 1.09 percent, Paris' CAC 40 gained 0.93 percent and Frankfurt's DAX advanced 1.42 percent.

[Associated Press; By LESLIE WINES]

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.