REUTERS - Wall Street looked set to open slightly higher on Monday after a string of recent economic reports pointed to strength in the U.S. economy.
Adding to the sentiment were U.S. Federal Reserve Chair Janet Yellen’s comments last week, urging caution on raising rates, given the risks from global economic conditions.
Data last week indicating strength in the U.S. labor market and a recovery in the manufacturing sector did little to change expectations for interest rate hikes by the Fed in 2016.
While the Fed’s projections point to two rate hikes this year, traders expect only one, according to the CME Group’s FedWatch program.
The reports and a rebound in oil prices in the past several weeks helped Wall Street recover from a steep selloff at the start of the year. The S&P 500 closed up marginally for the year on Friday.
“It’s just more of the positive attitude,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
Brown expects stocks to trade mostly sideways and within a tight range heading into the corporate earnings season, as investors remain wary of the uncertainty plaguing the markets.
“I think people are still kind of nervous of the U.S. economy, global economy and the election. That uncertainty is going to remain with us,” he said.
At 8:21 a.m. ET, Dow e-minis were up 10 points, or 0.06 percent, with 35,758 contracts changing hands. S&P 500 e-minis were up 3 points, or 0.15 percent, with 238,196 contracts traded. Nasdaq 100 e-minis were up 5.25 points, or 0.12 percent, on volume of 26,142 contracts.
Investors will parse comments by Fed officials slated to speak on Monday, including Minneapolis Fed President Neel Kashkari and Boston Fed President Eric Rosengren, for clues on the central bank’s thinking on monetary policy.
Data on Monday is expected to show factory orders fell 1.7 percent in February, after rising 1.6 percent the previous month. The report is due at 10 a.m. ET (1400 GMT).
Shares of Virgin America surged 40 percent to $54.33 in premarket trading, after the company agreed to be bought by Alaska Air for about $2.60 billion. Alaska Air shares were down 4.9 percent at $78.
Tesla rose 3.8 percent to $246.50 after the electric carmaker said orders for its new Model 3 sedan rose than 253,000 in the first 36 hours.
Edwards Lifesciences rose 12.3 percent to $101 after a study showed a less-invasive heart-valve implant was superior to open surgery, prompting a slew of brokerages to raise their ratings on the stock.
Reporting by Abhiram Nandakumar in Bengaluru; Editing by Anil D'Silva