Stocks point to higher open ahead of housing data

U.S. stocks signaled a moderately higher open Monday as investors look for bargains after last week’s pullback.

Investors are again examining the housing market for clues about the economy. The National Association of Home Builders is set to release its index of builders’ confidence for May at 1 p.m. Eastern.

There was some upbeat news on the housing industry before the opening bell. Lowe’s Cos., the nation’s second largest home improvement chain, posted a 22 percent drop in its first-quarter earnings but results topped Wall Street’s forecasts.

Steep losses on home values are one of the economy’s biggest trouble spots because it is hurting banks and consumers.

Banking company State Street Corp. said it plans to raise funds through stock and debt offerings as part of an effort to repay the $2 billion the government loaned as part of its financial rescue last fall. State Street, which specializes in serving institutional investors and wealthy customers, said it expects to raise $1.45 billion from the stock offer alone. The stock slipped 1 percent in electronic trading.

Dow Jones industrial average futures rose 52, or 0.6 percent, to 8,319. Standard & Poor’s 500 index futures rose 6.60, or 0.8 percent, to 889.60, while Nasdaq 100 index futures rose 8.50, or 0.6 percent, to 1,362.75.

Analysts say the ability of banks to turn to the market to raise cash is a welcome sign of stability, even if the introduction of added shares makes those already in circulation worth less.

“If you look back just 60 days ago the talk was of nationalization of some of our biggest banks. Some of the prognosticators were calling for 5,000 Dow,” said Jeff Layman, chief investment officer at BKD Wealth Advisors. The Dow closed Friday at 8,269.

He expects trading will remain volatile as investors look for signs that the recession is easing.

“It’s going to be fits and starts for a while,” Layman said.

Last week, the Dow slid 3.6 percent, the S&P 500 index lost 5 percent and the Nasdaq fell 3.4 percent as investors worried that the economy’s recovery might be further off than hoped after stocks rallied since hitting 12-year lows more than two months ago.

Bond prices mostly rose early Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.12 percent from 3.14 percent late Friday.

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

Light, sweet crude rose $1.92 to $58.26 in electronic trading on the New York Mercantile Exchange.

Beyond the housing sales report, Wall Street will be looking this week to data Tuesday on housing construction and regional manufacturing on Thursday.

Investors are looking for signs that the economy is starting to recover, not simply slow its descent. At the start of the market’s 30 percent rally since the lows of March 9 investors were willing to scoop up stocks when the economy signaled it might be stabilizing. But now, after the rally, analysts say more will be needed to carry the market higher.

Stocks overseas were mixed following weak corporate earnings reports in Asia. India’s index surged 17 percent after investors saw election results as paving the way for economic reforms. Japan’s Nikkei stock average fell 2.4 percent. In afternoon trading, Britain’s FTSE 100 rose 1.1 percent, Germany’s DAX index rose 1.2 percent, and France’s CAC-40 fell 0.9 percent.

Copyright 2009 The Associated Press.