Stocks are likely to see some strength in early trading on Monday, with the major index futures currently indicating a modestly higher open following the strength seen in the markets over the course of the previous week. The Dow futures are currently up about 30 points.
Trading activity may be somewhat subdued, however, as some traders are likely to stay on the sidelines ahead of the release of the results of the government's stress tests of the 19 largest U.S. banks as well as the release of the Labor Department's monthly employment report.
Citigroup (C), Bank of America (BAC) and Wells Fargo (WFC) may to react to reports that they are among the banks identified by the government as lacking in capital. It is believed that Citi and Bank of America are contemplating plans to raise roughly $10 billion each in fresh capital.
Not long after the open, trading could be impacted by the release of two separate reports that may shed some light on the outlook for the construction and housing sectors.
The Commerce Department's report on construction spending in the month of March is expected to show that construction fell 1.4 percent following a 0.9 percent decrease in the previous month. The decrease in February was far less steep than the 1.9 percent drop expected by economists.
Data on pending home sales is also due to be released a half-hour after the start of trading, with the National Association of Realtor's pending home sales index expected to come in unchanged in March after surging up 2.1 percent in February.
The index is seen as an indicator of future housing market activity, with a pending home sale one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
In other news, Sprint Nextel (S) is likely to be in focus after the telecom giant reported a wider first quarter loss compared to the year-ago period but reported an unexpected adjusted profit.
Sprint Nextel reported a net loss for the quarter of $594 million or $0.21 per share compared to a loss of $505 million or $0.18 per share in the year-ago quarter. Excluding items, the company earned $0.03 per share compared to analyst estimates of a loss of $0.05 per share.
Additionally, Pepsi Bottling Group (PBG) may attract some attention after the company said its Board of Directors has rejected a proposal by PepsiCo (PEP) to buy all outstanding shares of common stock of PBG not owned by PepsiCo as grossly inadequate.
Stocks showed a lack of direction throughout the trading day on Friday, with the major averages bouncing back and forth across the unchanged line before ending the day modestly higher. The lackluster performance came as traders digested some mixed earnings and economic news.
With the modest gains on Friday, the major averages all closed higher for the week, with the Nasdaq setting a nearly six-month closing high. While the Nasdaq rose 1.5 percent for the week, the Dow and the S&P 500 posted weekly gains of 1.7 percent and 1.3 percent, respectively.
After rising $1.90 to $53.20 a barrel last week, the price of oil is giving back some ground, with crude futures falling $0.31 to $52.89 a barrel. Meanwhile, gold futures are rising $3.50 to $891.70 an ounce after ending the previous week down $31.90 at $882.20 an ounce.
On the currency front, the U.S. dollar is currently trading at 99.385 yen after rising 2.7 percent to 99.29 yen in the previous week. The dollar is trading at $1.3231 versus the euro after edging down 0.2 percent last week to $1.3269 a euro.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Monday, benefiting from a report showing an expansion in Chinese manufacturing. The Japanese market remained closed for Greenery Day, a national holiday.
The major European markets are also moving higher, with the French CAC 40 Index currently up 0.7 percent and the German DAX Index advancing 1.2 percent. Meanwhile, the market in London remains closed due to a holiday.
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