Stock futures extended gains ahead of the opening bell Monday, following the worst week for stocks in two months, as the dollar recovered some ground against the yen and investors braced for the start of the earnings season.
Dow Jones Industrial Average futures YMM6, +0.47% rose 84 points, or 0.5%, to 17,569, while S&P 500 futures ESM6, +0.49% added 10 points, or 0.5%, to 2,050. Nasdaq-100 futures ESM6, +0.49% added 25 points, or 0.6%, to 4,492.
In focus later Monday is a meeting between Federal Reserve Chairwoman Janet Yellen and President Barack Obama on the U.S. economy.
Meanwhile, investors waited for Alcoa Inc.’s results—representing the unofficial start of earnings season.
The recent market correction appears to have come from concerns that price-to-earnings ratios may have bounced back too quickly, said Colin Cieszynski, chief market strategist at CMC Markets, in emailed comments.
“The answer to the question of whether prices are currently too high or earnings estimates are currently too low could spark significant moves in the markets over the coming weeks,” he added.
Stock futures were also boosted by a strengthening dollar USDJPY, +0.22% which pared losses against the yen after hitting fresh lows in Asia. Yen strength and dollar weakness drove some investors to avoid stocks last week. The Japanese currency is perceived as a haven in times of global economic worries.
Yellen and Obama: Fed chief Yellen will meet President Obama at 3 p.m. Eastern Time in the Oval Office of the White House. The two will discuss “the state of the American and global economy, Wall Street reform, and the long-term economic outlook, economic and regulatory issues,” the White House said in a statement.
New York Fed President William Dudley will speak at the Association for Neighborhood and Housing Development conference in New York at 9:25 a.m. Eastern. Later, Dallas Fed President Rob Kaplan will take part in a moderated discussion at Louisiana Tech University in Ruston at 1 p.m. Eastern.
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Stocks to watch: Shares of Yahoo Inc. YHOO, +0.92% rose 1.2% in premarket on Monday after the U.K.’s Daily Mail emerged as a possible bidder for the Internet group’s assets, The Wall Street Journal reported. Telecom giant Verizon Communications Inc. VZ, +0.04% is also among a big group of companies interested in Yahoo, as a deadline of April 18 looms for preliminary offers.
Shares of Hatteras Financial Corp. HTS, +9.26% rose 8.4% after Annaly Capital Management Inc. NLY, -2.11% announced a deal to buy the fellow real-estate investment trust for about $1.5 billion.
Alcoa AA, +0.64% will report after the market closes on Monday. Wall Street analysts expect a third straight quarter of declines in both earnings and revenue from the aluminum producer. Read more on what to expect from Alcoa
Those results will come amid expectations that S&P 500 companies will deliver the worst earnings quarter since 2009.
“It’s hard to argue against overall Street expectations for this quarter being particularly low, and the interesting reports this week will more than likely come out from the banks, which are expected to be a front-runner for negative earnings growth this period,” said Jim Reid, strategist at Deutsche Bank, in a note to clients on Monday.
Wall Street investors also will be looking ahead to the quarterly results for financial firms, including some of the biggest banks in the U.S., whose shares have badly lagged behind the broader market amid a hesitancy by the Fed to raise interest rates off ultralow levels. Lower rates can erode the gap between what banks make on loans and how much they pay on deposits.
Financial stocks have been the worst performing sector this year, falling 8% year to date.
On Wednesday, J.P. Morgan Chase & Co. JPM, +0.36% will report earnings. Wells Fargo & Co. WFC, -0.11% and Bank of America Corp. BAC, +0.08% will follow on Thursday, and Citigroup Inc. C, +0.72% on Friday.
Other markets: European stocks SXXP, +0.63% rose, led by the banking sector, while Asia had a mixed day. The Shanghai Composite Index SHCOMP, +1.64% finished 1.6% higher after soft Chinese inflation data drove hopes that authorities will act again to stimulate the economy. The Nikkei 225 index NIK, -0.44% closed down 0.4%, weighed by yen strength.
Gold prices GCM6, +0.64% were slightly higher early Monday, after enjoying their best weekly gain in three weeks on Friday, while yield on the benchmark 10-year Treasury note TMUBMUSD10Y, +1.42% gained 2.3 basis points to 1.745%. Yields move in the opposite direction of prices.