U.S. Stocks Positioned For Opening Jump Anticipating Fed

NEW YORK (MarketWatch) -- U.S. stocks readied for a higher opening Monday, the start of a week expected to bring another interest-rate cut by the Federal Reserve, with the view helping bolster financial stocks badly battered in recent months by subprime mortgage losses.

"While the data hasn't provided a compelling case for another aggressive Fed injection of liquidity, recent ghoulish third-quarter financial sector write-offs appear to have swung market sentiment toward a deeper insurance cut," said analysts at Action Economics.

Futures for the Dow Jones Industrial Average rose 34 points to 13,882.

Those for the S&P 500 gained 3.90 points to 1,546.50, while Nasdaq 100 futures advanced 13.25 points to 2,220.50.

Climbing oil prices could spark movement into energy stocks, with crude-oil futures hitting a high of $93.20 a barrel overnight, and gold reaching its highest level since January 1980.

In pre-market activity on the New York Mercantile Exchange, crude for December delivery was recently up 40 cents at $92.26, while gold futures climbed $2.50 to $790.00, after touching $798.30 earlier on.

The resignation of Merrill Lynch & Co.'s beleaguered chief executive Stan O'Neal could come as early as Monday morning in the wake of the brokerage's third-quarter losses of $2.24 billion.

Investors are looking to the Fed, which lowered rates by a half-point in September, to follow up with another cut at the close of a two-day Federal Open Market Committee meeting that begins Tuesday.

Shares likely to be active include BEA Systems Inc. , which said it had replied to call from activist investor Carl Icahn that it put Oracle Corp's $17-a-share bid up for a shareholders' vote, with BEA saying it is open to a sale.

By Kate Gibson