US stocks set for steady open, earnings in focus

LONDON, July 16 (Reuters) - U.S. stock index futures indicated a steady start on Wall Street on Monday, extending last week's gains in markets, with investors betting on strong second-quarter results as earnings kick off this week.

However, markets will keep a close eye on the impact of rising oil prices. Oil rose above $78 a barrel, driven towards a record high by an influx of speculative fund money and tightening crude supplies from the North Sea.

London Brent LCOc1 hit a fresh 11-month high of $78.12 -- just 53 cents away a record high of $78.65 last August.

By 0955 GMT, Dow futures DJc1 were up 0.05 percent and both S&P SPc1 & Nasdaq futures NDc1 ticked up 0.1 percent.

"At the moment the key focus is going to be on earnings, which are supporting markets," said a trader.

"Once we have the heavyweight earnings out of the way, markets might switch back to the impact of oil," he said.

Diversified manufacturer Eaton Corp (ETN.N), toymaker Mattel MAT.N and microchip tools supplier Novellus Systems (NVLS.O) are among the S&P 500 companies reporting earnings on Monday.

After a week when the Dow Jones industrial average .DJI and Standard & Poor's 500 index .SPX reached record highs on mergers and acquisitions activity and multi-billion-dollar share buyback plans, investors are expected to focus on corporate results, inflation data and the Federal Reserve for news.

Besides a flood of results later in the week, Federal Reserve Chairman Ben Bernanke will give two days of semiannual testimony on U.S. monetary policy before Congress.

On Monday European stocks rose for the third session in a row, with banks among the top gainers after a group led by Royal Bank of Scotland (RBS.L) improved the cash element of its offer for Dutch bank ABN AMRO AAH.AS.

MSCI's All Country World Index .MIWD00000PUS hit a new record at 415.28, up nearly 13 percent so far this year.

On the corporate news front, U.S. automaker Ford Motor Co. (F.N) is considering selling its Volvo Cars business as it assesses the future of its European operations, a source familiar with the matter said.

The review of Volvo was still at a very early stage and may not result in a sale, the source told Reuters, adding that Ford had so far not hired financial advisers for the operation. (Additional reporting by Rachel Breitman in New York)