U.S. Stocks To Open Slightly Higher; Data Stream Ahead

NEW YORK (MarketWatch) -- U.S. stocks are set to move modestly higher at Tuesday's opening as investors seek out attractively priced shares after the recent rout and await new reports about the nation's housing market and consumer sentiment.

Trading is likely to be restrained ahead of the Federal Reserve's decision on rates on Thursday.

The futures contract for the Dow Jones Industrial Average last was up 21 points at 13,500.

Futures contracts for the S&P 500 and the Nasdaq 100, respectively, were 3 points higher at 1,516.60 and 4 points higher at 1,945.

On Monday, stocks closed a volatile session with losses amid continued nervousness about subprime lending and two Bear Stearns hedge funds with exposure to that sector. The Dow industrials dropped 8 points, the S&P 500 fell 4.8 points and the Nasdaq Composite finished 11.9 points to the worse, as the market surrendered sizable gains toward the end of the session.

Monday's losses followed a heavy selloff on Friday, leaving investors to ponder the market's next move.

"Technically, the market took a big blow on Friday. A snap-back bounce proved to be little more than a trade and not a major market turn," said Marc Pado, U.S. strategist at Cantor Fitzgerald. "Now we have to focus on what will make this decline accelerate."

The May new-home sales and June consumer-confidence reports, both due at 10 a.m. Eastern time, could provide new catalysts for trade. Concerns about the slump in the housing market is another factor that has put pressure on the stock market.

Based on a MarketWatch poll, economists are forecasting that sales of new homes amounted to 930,000 units last month, which would be up from 981,000 in April, and consumer confidence is projected to show a reading of 105.0 for June, which would down from 108.0 in May.

Stocks on the move

Shares of retailer Target Corp. fell 1.2% to $63.40 in electronic trading ahead of the bell. The company said that June same-store sales growth will be at the low end of its planned 3%-to-5% range.

On the earnings front, Kroger Co. reported quarterly earnings before special charges that exceeded analyst's expectations and a gain in revenue. There were few premarket quotes for the supermarket operator's stock, but it should be active after the opening.

There also are earnings reports scheduled for and Nike Inc. after the Tuesday close.

Meanwhile, the Dutch advocate general declared that ABN Amro's planned $21 billion sale of its LaSalle unit to Bank of America doesn't require a shareholder vote. The decision is viewed as advancing Barclays plc in its bid to acquire ABN Amro.

Also on the deals front, BlackRock Inc. agreed to buy the fund-of-funds business of Quellos Group for up to $1.7 billion. BlackRock said the deal will make it one of the largest fund-of-funds providers, with over $25.4 billion under management.

Among the block chips, Altria Group Inc. will take a charge of $325 million, or 10 cents a share, againts results for the second quarter in connection with plans to shut down its 2,500-employee Philip Morris cigarette factory in Cabarrus, N.C., by 2010 in a move to cut costs.

Other markets

Treasurys were pinned in a narrow range ahead of Thursday's Fed rate decision. The central bank's widely expected to leave the federal funds rate unchanged at 5.25%, but its accompanying statement should provide clues as to whether a rate increase or a cut could be in store in coming months.

The benchmark 10-year note was unchanged at 95 17/32 with a yield of 5.081%.

In currencies, the yen overnight managed to strengthen against its major rivals. Finance Minister Koji Omi's comments that he's keeping a close eye on foreign-exchange rates preoccupied traders, according to Ashraf Laidi, a currency analyst at CMC Markets.

The dollar last was down 0.5% at 122.94 yen as the euro nudged 0.0% higher at $1.3472.

Commodities prices were pushed lower ahead of the U.S. data reports. The front-month crude futures contract last was 30 cents lower at $68.88 a barrel, as the August gold contract fell to $650.80 an ounce, down $3.90.

By Leslie Wines