U.S. stocks were set for a higher open on Monday with Wall Street looking to extend three weeks of gains as some investors said shares could rally in a thinly traded, holiday-shortened week.
Several companies announced acquisitions. AT&T Inc
Stocks have rallied strongly this month, with the S&P 500 index up more that 5 percent in December to a two-year high. Some investors say that the market is overbought, however, and could be ripe for profit-taking.
The channel is sideways to higher. The market is clearly bid, said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.
The S&P 500 has rallied nearly 19 percent since the end of August and is up 11.6 percent so far this year.
Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, said the trend in stocks was higher but said elevated bullishness and options activity was pointing to a near-term top in equities.
Perhaps we could see a bit of a prick to the euphoria bubble that investors seem to be experiencing, he said.
S&P 500 futures rose 4.6 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 gained 38 points, while Nasdaq 100 futures rose 9.25 points.
U.S. markets will be closed on Friday to observe the Christmas Day holiday the following day.
Underscoring expectations of strong holiday spending, U.S. online sales are up 12 percent to $27.5 billion so far this season compared with a year ago, according to research firm comScore.
Adobe Systems Inc
Food and beverage company Sara Lee Corp
(Editing by Padraic Cassidy)