Bank Test Hopes, Sprint Nextel Boost Futures

Futures indicated a positive open for U.S. stocks on Monday helped by anticipation that this week's bank stress test results will be relatively benign.

The Dow and S&P 500 were showing indicating gains of less than 0.5 percent while the Nasdaq was a bit higher.

"Markets are very resilient at this stage," Christian Gattiker, head of research at Julius Baer, said. Investors are expecting a "rather benign" outcome from the financial crisis, he added.

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The stress test results are expected to show that the banks may have to raise $150 billion or more in fresh capital, according to Reuters.

Bank of America is working on plans to raise more than $10 billion in fresh capital while it and Citigroup launched last-ditch attempts to convince the U.S. government they do not need to bolster their balance sheets, the Financial Times reported. A Wall Street Journal report indicated Citi may have to raise as much as $10 billion as well.

BofA dropped 1.4 percent in premarket trading while Citi edged higher.

Other bank shares moved up as well, with Wells Fargo gaining 3.3 percent

Spint Nextel reported earnings that beat analyst estimates even

as more postpaid customers defected to rival services and business customers canceled services due to the recession. Shares gained more than 10 percent in premarket trading.

Sprint's net loss swelled to $594 million, or 21 cents per share from a loss of $505 million, or 18 cents per share in the same quarter a year ago.

But excluding unusual items, Reuters Estimates said that it would have posted a profit of 3 cents a share compared with average analyst estimates for a loss of 4 cents a share.

Elsewhere in earnings, Tyson Foods posted a quarterly loss that was worse than expectations, due to lower meat sales and additional tax expenses. Shares fell 3.3 percent premarket.

European and Asian markets were higher in thin trade on Monday, benefiting from Wall Street's gains on Friday, where stocks rose as economic data suggested key parts of the economy could be stabilizing.

Reports on Friday showed U.S. consumers felt more optimistic about the economy in April while manufacturing data suggested it was gradually emerging from a deep slump.

Markets in the UK and Japan were closed Monday for a public holiday.

Investors were also encouraged by signs that the new swine flu strain outbreak may be under control after Mexico said the epidemic had passed the worst and experts told Reuters the new H1N1 virus might be no more severe than normal flu.

A number of events this week could dampen the rally as government stress test results are due out on Thursday, while U.S. nonfarm payrolls data is due out Friday.

"A lot will depend on the employment report," Leo Tilman, president of L.M. Tilman & Co., told CNBC.

In other corporate news, American International Group is close to selling its Japanese headquarters for about $1 billion and the expected buyer is a Japanese insurance company, the Wall Street Journal reported.

Fiat's chief executive Sergio Marchionne told the Financial Times he is heading to Berlin, Germany, to convince Germany's government to sign up to his vision for a new European car giant by letting him take over General Motors' Opel unit.

Fiat signed a deal with Chrysler last week to form a partnership after the automaker filed for Chapter 11 bankruptcy.

Chrysler was preparing to launch a marketing campaign on Tuesday to reassure customers and potential buyers that the auto maker is still alive, the Journal.

Economic data out Monday includes U.S. March pending home sales at 10 am New York time, as well as March construction spending data.

Kansas City Federal Reserve President Thomas M. Hoenig will speak on the financial crisis at 12:30 pm New York time in New York, and Richmond Fed President Dr. Jeffrey Lacker will give his economic outlook at the same time in Charlottesville, Va.

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