Sock index futures rose on Tuesday as a takeover offer looked set to help lift the health-care sector, while a dip in bond yields gave investors a break from interest-rate worries.
Ventana Medical Systems Inc. (VMSI.O), a tissue-based diagnostics specialist, received a hostile takeover offer from Swiss drug maker Roche (ROG.VX) late on Monday, sending Ventana shares up nearly 50 percent to $77.30 in electronic composite trading before the opening bell.
"There have been so many rumors that there will be no more deals being done. VMSI getting taken out by Roche helps the market out," said Todd Leone, head of listed trading at Cowen & Co. in New York.
S&P 500 futures (SPc1) were up 2.9 points, above fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.
Dow Jones industrial average futures (DJc1) rose 16 points, and Nasdaq 100 (NDc1) futures rose 3 points.
Data on new home sales, which is expected to show a decline in May, will be widely watched in the wake of disappointing results from Lennar Corp. (LEN.N), the No. 2 U.S. home builder.
The Commerce Department data on home sales is due at 10 a.m. (1400 GMT). Economists on average expect sales to slip to 925,000 at annual rate from 981,000 at annual rate the previous month.
Apple Inc. (AAPL.O) could give the Nasdaq a lift after the company launched details of its service plans for its iPhone. Brokerage RBC initiated coverage of Apple with an "outperform" rating.
Apple shares rose 1.1 percent to $123.68 before the opening bell.
The yield on the 10-year Treasury note edged down to 5.08 percent. Stocks have lost ground recently as declines in bond prices forced yields higher, adding to worries about higher borrowing costs.
"Bond yields got closer to 5 percent than 5.2 percent yesterday, which is positive, but people weren't focusing on that," Leone said.
He added that concerns over fallout from the subprime mortgage market hit stocks late in the session on Monday and sent the indexes lower for the day.
Lennar reported a quarterly loss and forecast another loss for the third quarter. Lennar said it continues to see weak and "perhaps deteriorating market conditions" for the remainder of 2007.
Shares of Lennar were down 2.6 percent at $37.75 in electronic composite trading.
A June reading of consumer confidence will be released at the same time as the new home sales data. Consumer confidence likely dipped to 105.5 from 108 this month, according to the median estimate of economists polled by Reuters.
Shares of Kroger fell more than 2 percent to $28.90 before the opening bell after the grocer posted a quarterly profit that missed analysts' expectations.
source:www.washingtonpost.com
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