Stock futures point to higher open By LAUREN VILLAGRAN, AP Business Writer

Stock futures point to higher open By LAUREN VILLAGRAN, AP Business Writer
22 minutes ago



NEW YORK - U.S. stocks looked to rebound when trading begins Monday as more central banks overseas added cash to their banking systems, helping investors set aside concerns about credit tightness.

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The Bank of Japan put $5 billion into the markets Monday, while the European Central Bank added $65.3 billion, after providing more than $200 billion last week. The moves, following similar injections by the U.S. Federal Reserve last week, placated Wall Street for now and allowed it to look ahead to a week of fresh economic data.

Investors seemed pleased with the Commerce Department's report that retail sales edged up 0.3 percent in July, slightly ahead of market expectations. Wall Street has been closely monitoring consumer spending, as it accounts for two-thirds of total economic activity.

After enduring sharp swings to the downside last week, the Dow Jones industrials and other major indexes ultimately finished the week with a gain. Stocks pointed to an extension of those gains at the opening of trading Monday, as Dow futures rose sharply in premarket activity; however, as last week's trading showed, the market could swing from gains to losses through the course of the day.

Dow futures expiring in September rose 123, or 0.90 percent, to 13,360, while Standard & Poor's 500 index futures rose 17.30, or 1.19 percent, to 1,468.30. Nasdaq 100 index futures advanced 23.00, or 1.19 percent, to 1,952.00.

Investors were in a better humor Monday, despite the great deal of uncertainty in the market over the extent of problems in the subprime mortgage sector. Defaults among subprime mortgage holders — people with poor credit — began the chain of events that led to the turmoil on Wall Street and other stock markets the past few weeks.

Those defaults recently led to the collapse of two Bear Stearns funds with risky mortgage-backed investments and last week prompted French bank BNP Paribas to freeze three funds with exposure to the U.S. subprime mortgage market.

Goldman Sachs Group Inc. said Monday that its funds using quantitative strategies, or mathematical modeling, "are currently under pressure" after global markets sold off on worries about debt and credit. The investment bank said it and certain large investors have committed to a $3 billion equity investment in its Global Equity Opportunities fund, which "has suffered significantly." The fund had a net asset value of about $3.6 billion before the equity investment.

The Fed indicated Monday that it "stands ready" to supply more liquidity to the market. The federal funds rate traded at the central bank's target 5.25 percent; last week, a fed funds rate of about 6 percent triggered cash injections last week.

On Monday, struggling subprime lender Accredited Home Lenders Holding Co. said it has sued Lone Star Fund V LP and two affiliates to get the private equity firm to follow through with an agreed-to takeover. Lone Star said Friday in a regulatory filing that Accredited no longer met the conditions of its $400 million acquisition offer. Without a deal, Accredited has cautioned that it may face bankruptcy.

Overseas Monday, Japan's Nikkei stock average gained 0.21 percent. Britain's FTSE 100 jumped 2.47 percent, Germany's DAX index added 1.45 percent, and France's CAC-40 rose 2.08 percent.

The dollar was mixed against other major world currencies. Gold futures fluctuated, while crude oil futures rose in premarket activity.

Bond prices fell as the yield on the 10-year Treasury note rose to 4.81 percent from 4.80 percent late Friday.

In economic news, the Commerce Department on Monday reports retail sales for July and business inventories for June. Investors will also monitor two key barometers of inflation — the Labor Department's Producer Price Index on Tuesday and Consumer Price Index on Wednesday. Because the Fed has made it clear as recently as last week that its primary concern is fighting inflation, Wall Street could react poorly if the PPI or CPI comes in higher than expected.

In its first quarterly report as a public company, private equity firm Blackstone Group LP posted second-quarter revenue of $975.3 billion, below analysts' consensus of $1.06 billion. The company's much-anticipated initial public offering in June raised about $4 billion, but the stock has fallen short of expectations.