Stocks headed for a higher open on Monday as stronger-than-expected quarterly results from No. 2 U.S. home improvement chain Lowe's Cos Inc
The Lowe's results served as a crucial spur for investors looking for fresh catalysts to sustain the market's recovery from the 12-year lows of early March.
Positive broker comments on such stocks as Bank of America Corp
Shares of Lowe's rose more than 9 percent to $20.15 before the bell, and that optimism spilled over into shares of leading rival Home Depot Inc
Lowe's posted profits that topped analysts' estimates and raised its full-year outlook, a sharp contrast to last week's disappointing April retail sales data that helped spark a brief halt to the market's advance.
Lowe's is a great one to have good news on. It is a retailer and it speaks to consumer spending, but it is also very directly tied to real estate, said Arthur Hogan, market analyst at Jefferies & Co in Boston.
You've got a platform to get excited about, something we can build on when we get Home Depot results.
S&P 500 futures rose 6.30 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones Industrial Average futures climbed 56 points, while Nasdaq 100 futures shot up 11.75 points.
Shares of Home Depot, a Dow component, climbed nearly 4 percent to $25.30.
In broker research news, Goldman Sachs raised its recommendation on Bank of America to buy. Separately, Citigroup said it now projects Bank of America posting a second-quarter profit instead of a loss.
Shares of Bank of America rose more than 7 percent to $11.49 before the bell.
On Friday, the benchmark S&P 500 <.SPX> closed out its worst week in two months as some high-flying sectors, including financials, succumbed to profit-taking and investors rotated into defensive sectors like healthcare.
The S&P 500 recently peaked from the 12-year low of March 9, jumping 37.4 percent on May 8, but at Friday's close the index had given up some ground to end up 30.5 percent from its significant low.
(Reporting by Ellis Mnyandu; editing by Jeffrey Benkoe)