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US Stocks Point Higher Ahead of Earnings

U.S. futures were higher on Wall Street Monday, following the worst weekly decline for major averages this year ahead of earnings results from Alcoa after the close.

Signs the economy has entered a soft patch could dampen investor sentiment on Wall Street, but it may be earnings season that ultimately makes stocks stumble, strategists told CNBC on Friday, after a dismal jobs report saw the S&P 500 and Nasdaq log their worst week of 2013.

The earnings outlook for the current quarter is fairly weak, with growth expected to increase by just 1.6 percent, compared to 6.2 percent last quarter, according to Thomson Reuters. The quarter also has seen an unusually high number of negative warnings, with 107 negative revisions for companies in the S&P 500. Compared to positive revisions, it is the worst pace in 12 years, the news agency added.

(Read More: Now It's Earnings That Could Stall the Stock-Market Rally)

In corporate news, General Electric agreed to buy oilfield services giant Lufkin Industries for $3.38 billion in cash, or $88.50 a share. Lufkin surged nearly 40 percent following the news.

And Macy's and rival J.C. Penney are due back in court in their battle over Martha Stewart home goods after a month-long mediation effort appeared to have failed.

On Monday, Cleveland Fed President Sandra Pianalto will be speaking, while Bernanke will be speaking on Monday evening on the topic of maintaining financial stability at a conference organized by the Atlanta Fed.

"The $3 trillion question for investors in the coming two to three years is what will happen to the Fed's balance sheet, and what the impact of any quantitative tightening (QT) will be on the economy and financial markets … policymakers can probably continue to call the shots on the pace of QT as opposed to having it forced on them by markets (fingers crossed with respect to inflation, though). But don't expect the Fed's balance sheet to come down quickly anytime soon," Stuart Parkinson, strategist from Deutsche Bank. said in a note on Monday.

Traders will also be looking out for more clues over the future of quantitative easing in the coming week when the Federal Reserve releases minutes from its last meeting on Wednesday. There are also more than a half dozen appearances by Fed officials in the coming week, including Fed Chairman Ben Bernanke.

In Europe, shares were higher, shrugging off negative news flow and Friday's weak employment numbers in the U.S. In Asia, too, markets in Shanghai and Hong Kong pared steep losses caused by worries over the Korean peninsula and fears of a new strain of avian flu in China.

Meanwhile, U.S.Treasury Secretary Jack Lew is starting a two-day trip to Europe for economic discussions with the region's officials and leaders. Lew is scheduled to meet with members of the European Commission in Brussels on Monday and will also travel to Frankfurt where he will meet with European Central Bank President Mario Draghi.

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