Stocks head for higher open ahead of economic data
Monday November 3, 7:59 am ET
By Madlen Read, AP Business Writer
Wall Street points to higher open ahead of data on manufacturing, construction and auto sales


NEW YORK (AP) -- Wall Street prepared to build on last week's recovery, with stock futures rising moderately Monday after another drop in bank-to-bank lending rates and ahead of readings on manufacturing activity, construction spending and auto sales.
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Investors are already prepared for the day's reports to support the growing belief that the economy is in recession, hurt by tight credit and slow consumer spending. The question is whether the data will indicate the economy is in even more dire shape than the Dow Jones industrial average has priced in after tumbling more than 14 percent in October -- its worst month in 21 years.

The Institute for Supply Management is expected to report that the manufacturing sector contracted in October faster than it did in September, while the Commerce Department is expected to report that construction spending dropped 0.8 percent in September following a flat reading for August, according to economists surveyed by Thomson/IFR.

Analysts are also anticipating extremely weak vehicle sales figures from the auto industry for October -- even more anemic than in September, when automakers said fewer than 1 million vehicles were sold for the first time in 15 years.

Ahead of the market's open Monday, Dow futures rose 54, or 0.58 percent, to 9,352. Standard & Poor's 500 index futures rose 3.70, or 0.38 percent, to 971.00, while Nasdaq 100 index futures rose 1.25, or 0.09 percent, to 1,338.25.

Given how far the stock market has already tumbled, analysts believe the market is showing signs of bottoming out. Last month, for all its problems, did end with a positive tone, thanks in large part to weeks of gradual improvement in the tight credit markets, but also because mutual funds were finished with selling at the end of their fiscal year. The Dow added 11.3 percent last week, its best weekly performance in 34 years, while the S&P 500 index climbed 10.5 percent.

On Monday, the interbank lending rate known as Libor fell to 2.86 percent for three-month dollar loans -- that's down from 3.03 percent Friday, and the lowest level since Sept. 17.

Demand for government debt remained high, however. The yield on the three-month Treasury bill, seen as one of the safest assets around, rose only slightly to 0.46 percent from 0.43 percent Friday. A low yield indicates high demand. Meanwhile, the yield on the benchmark 10-year Treasury note was at 3.96 percent, the same as late Friday.

Trading is expected to be light Monday, with many investors sitting on the sidelines ahead of Tuesday's presidential election. Many analysts have said that in general, neither candidate is more favored than the other on Wall Street, but investors are eager to put the uncertainty behind them.

On Monday, the dollar was lower against most other major currencies, while gold prices rose.

Light, sweet crude fell 77 cents to $67.04 a barrel in premarket electronic trading on the New York Mercantile Exchange.

Overseas, Britain's FTSE 100 rose 0.73 percent, Germany's DAX index rose 0.96 percent, and France's CAC-40 advanced 0.35 percent. Hong Kong's Hang Seng Index climbed 2.7 percent. Japan's stock market was closed for a holiday.

New York Stock Exchange: NYSE, New York Stock Exchange

Nasdaq Stock Market: NASDAQ Stock Market - Stock Quotes - Stock Exchange News - NASDAQ.com

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