Stocks were set to open higher on Monday, extending gains following Wall Street's best week in 4 months, after CIT Group Inc clinched a deal that could help avoid bankruptcy, removing some uncertainty as the financial sector recovers from a deep crisis.
The market is cheering the leading role the private sector is taking in the rescue, according to Steve Goldman, market strategist at Weeden & Co in Greenwich, Connecticut.
Slowly the private sector is taking over its leadership role, now that fear and panic is slowly subsiding, he said. Allowing the private sector to come in and play a larger and more important role is a sigh of relief for the markets.
S&P 500 futures were 6.5 points higher 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 rose 45 points, and Nasdaq 100 futures gained 4.5 points.
Despite warning there is still a significant risk of a double-dip recession, Goldman Sachs raised its year-end target for the benchmark S&P 500 index <.SPX> to 1,060 from 940 -- a rise of almost 13 percent from current levels.
Adding to the positive tone, White House Budget Director Peter Orszag said Sunday that second-quarter U.S. gross domestic product data is likely to be better than first-quarter levels, indicating improvement in the economy.
In company news, shares of Human Genome Sciences Inc
Conference Board leading indicators data is expected at 10 a.m. EST and is likely to show the U.S. economy is nearing the end of a 19-month-long recession.
Companies reporting quarterly scorecards on Monday include Texas Instruments Inc
Weeden & Co's Goldman said the bar may be raised for expectations, following a healthy start to earnings season and very strong results from Goldman Sachs Group Inc
U.S. stocks closed out their best week in four months on Friday on a flat note as strong earnings from IBM
(Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)