U.S. stock index futures pointed to a strong gain at the open on Monday and looked set to reverse a three-day selling spree that wiped out index gains for the year as U.S. Federal Reserve Chairman Ben Bernanke edged closer to winning support for a second term.
On Sunday, the U.S. Senate Republican leader predicted confirmation, and Democrats aimed to have a vote this week, removing a major source of uncertainty for investors.
The embattled Fed chair's prospects appeared shaky last week, when two Senate Democrats announced their opposition, contributing to the worst three-day slide in equities in 10 months.
That key policymakers are suggesting that the odds of Bernanke being reconfirmed are high is definitely soothing for investors, said John Brady, senior vice president at MF Global in Chicago.
However, soothing words are one thing, and votes are another. While we're getting a lift from being oversold on Friday, I suspect the market will be somewhat hesitant until the votes are in.
Markets erased gains for the new year last week, with the Dow dropping 4.1 percent, the S&P 500 losing 3.9 percent and the Nasdaq tumbling 3.6 percent. It was the worst week for the S&P 500 and Nasdaq since October and the worst week for the Dow since March.
Ongoing earnings reports will be in focus on Monday as tech stocks Apple Inc
S&P 500 futures gained 7.7 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 surged 60 points, while Nasdaq 100 futures added 7.75 points.
Sam's Club, the warehouse club division of Wal-Mart Stores Inc
December U.S. existing home sales data is due at 10 a.m. EST from the National Association of Realtors. Sales are forecast to fall month-over-month by 10 percent to an annual rate of 5.9 million units.
If home sales come in significantly below expectations, we could see our gains erode, said Andre Bakhos, president of Princeton Financial Group in North Brunswick, New Jersey.
The market has been hyper-sensitive to data, especially important numbers like this.
Earnings will be a focus throughout the week, which will see reports from several Dow components, including Boeing Co
(Editing by Padraic Cassidy)