* Wall St set to recover at open after worst week of the
* Monetary stimulus offsets earnings, economic worries
* Bernanke to speak after the market closes
* Lufkin Industries up 37 pct planned purchase by GE
By Leah Schnurr
NEW YORK, April 8 Wall Street was set to open
modestly higher on Monday, bouncing back from the worst weekly
decline this year even as investors face the prospect of a
lackluster corporate earnings season.
Earnings forecasts have been scaled back heading into
first-quarter reports. S&P 500 earnings are expected to have
risen just 1.6 percent from a year ago, according to Thomson
Reuters data, down from a 4.3 percent forecast in January.
Worries on Friday about the pace of earnings growth was a
factor in Wall Street racking up its worst week this year so
far, while a weaker-than-expected jobs report prompted concern
the U.S. economy is in a slow patch.
Despite those headwinds, the loose monetary policy from
central banks around the world continues to attract investors to
equities, said Peter Cardillo, chief market economist at
Rockwell Global Capital in New York.
"It's all about easy money and it's lifting equities around
the globe at this time," said Cardillo.
The Bank of Japan started its bond purchases after it
announced last week it will inject about $1.4 trillion into the
economy in less than two years.
In the United States, the Federal Reserve's bond buying
program has been a significant catalyst of the recent rally that
has sent major indexes to record levels.
Still, U.S. markets could see a technical correction of
about 6 percent to 8 percent in the latter part of the month as
the focus turns to corporate results, said Cardillo.
JPMorgan Chase and Bed Bath and Beyond are
among the major companies set to announce results later in the
week, while Alcoa's earnings will be the first from a Dow
component after Monday's closing bell.
The S&P 500 is up nearly 9 percent for the year so far,
while the Dow has gained more than 11 percent.
S&P 500 futures rose 4.9 points and were above fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures gained 18
points, and Nasdaq 100 futures added 9.5 points.
Fed Chairman Ben Bernanke will give a speech later on Monday
after markets are closed. Investors have been watching for any
insight into the Fed's thinking on how long the central bank
will keep its asset purchase program in place as it tries to
boost the economic recovery.
General Electric Co said it will buy oilfield
services provider Lufkin Industries Inc for about $3.3
billion, sending Lufkin shares up 37.5 percent to $87.95 in
premarket trade. GE edged up 0.3 percent at $23.00.
Investors will be keeping an eye on the latest developments
out of the euro zone after a constitutional court in Portugal
overturned key austerity measures in the government's latest
budget. Portugal's prime minister said the government will cut
spending to meet targets agreed with its lenders.