U.S. shares are expected to rise again on Monday, underpinned by hopes that the Federal Reserve will keep interest rates unchanged at its policy-setting meeting on Wednesday, and as oil prices stayed below $64 a barrel.
Results from fast-food company Yum Brands Inc. will dominate a thin corporate diary, leaving investors' focus on the macroeconomic and monetary picture.
Tame U.S. consumer prices, coupled with an 18-percent dip in oil prices over the past 6 weeks, have quelled worries about inflationary pressures, although this has now given way to concern over the health of the world's biggest economy.
The visibility of a sharp and relatively broad-based U.S. slowdown is poised to increase in coming months, said Merrill Lynch economist David Rosenberg, who expects U.S. gross domestic product growth of around 2 percent for the second half of 2006, down sharply from the 4.4 percent seen in the first half.
For 2007, we see 1.9 percent growth, down from 3.4 percent this year. Housing is set to collapse further, pulling down consumer spending growth to a mere 1.6 percent in 2007, after 3 percent in 2006, Rosenberg added.
Investors will therefore scour the publication of the National Association of Homebuilders Index for September at 1700 GMT. Other scheduled economic items include second-quarter current account figures at 1230 GMT.
By 1010 GMT, U.S. stock futures were pointing to opening gains of between 0.1 percent and 0.2 percent for the three main indexes.
On Friday, the Dow Jones industrial average added 0.29 percent to 11,560.77 points, and the Standard & Poor's 500 Index gained 0.27 percent at 1,319.87, while the Nasdaq Composite Index rose 0.31 percent at 2,235.59.
Oil prices nudged higher for a second day, up 0.4 percent at $63.61, but struggled to end their steepest slump in more than a decade. This was likely to further soothe inflation worries but could pressure selected energy stocks.
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Still on the takeover front, rural telephone provider Citizens Communications Co. said it had agreed to buy Commonwealth Telephone Enterprises Inc. for $41.72 per share in cash and stock, or a total of $1.16 billion, to expand its presence in Pennsylvania.
In the autos sector, industry newspaper Automotive News reported that senior executives at General Motors Corp.and Ford Motor Co. have discussed a merger or alliance.