U.S. Stocks Open Higher After Friday Slide

NEW YORK (MarketWatch) -- U.S. stocks rose slightly at the open Monday, rebounding from a sell-off on Friday, as investors cheered a steep drop in crude oil prices and looked past capitalization problems at Lehman Brothers.

The bounce remained timid, however, given the Dow industrials nearly 400-point drop on Friday on news that the U.S. jobless rate jumped up to 5.5% and as oil surged nearly $11 to approach $140 a barrel.

Economists said the jump, the biggest monthly rise since 1975, was a further indication the U.S. economy had slipped into recession.

The Dow Jones Industrial Average was up 47 points at 12,255, with 24 of its 30 components advancing.

Leading the gains on the Dow, shares of McDonald's rose 4% after reporting same-store sales rose 7.7% in May.

The S&P 500 was up 4.7 points at 1,362.20, while Nasdaq Composite was down 11 points at 2,463.

Investors were selling technology shares ahead of a key second-quarter update from Texas Instruments will provide its mid-quarter update for the second quarter.

Separately, Apple will kick off its annual developers conference in San Francisco.

Financial shares were also under pressure. Shares of Lehman Brothers Holdings Inc. dropped 10% after the investment bank said it would raise $6 billion in a stock offering. Lehman also expects to report a sizable second-quarter loss of $2.8 billion, or $5.14 a share.

The dollar was mixed against major global currencies, losing ground against the euro but rallying against a broadly weaker Japanese yen.

Lehman on Monday shifted its stance on European stocks to underweight from overweight and increased its exposure to U.S. equities, which it upgraded to overweight from underweight.

The broker said it's also adding to its already overweight position in the Japanese market. Lehman said the changes were due to the European Central Bank's hawkish stance on rates and the implications of that on stocks for the region, and the contrast in approach with the stance of the U.S. Federal Reserve.

On Monday's data calendar, U.S. pending home sales for April are set for release at 10 a.m. Eastern. They dropped 1% in March.

European markets were flat to lower to begin the week, with the CAC-40 in Paris little changed and London's FTSE 100 slipping slightly lower. In Asian trading, Japan's Nikkei 225 Average fell 2.1% overnight to 14,181.3.

By Nick Godt