US stock index futures pointed to a higher open Monday following a negative week for the major indexes, as bank stocks moved higher and earnings provided some optimism.
- Dow 30 Stocks: Extra-Hours Quotes
- Pre-Markets/Futures Data
- Video: What's Moving the Markets?
Last week the Dow Jones Industrial Average shed 3.6 percent, the Nasdaq fell 3.4 percent and the S&P 500 lost 5 percent. But the declines came on the back of a strong couple of months for US stocks.
“We've had a very strong move and the issue, of course is, is this sustainable?" Sean Landers, head of US equity sales from Pali International, told CNBC.
“At turning points it’s hard to judge,” Landers added.
Among other things, traders were watching a handful of earnings reports that came out in the morning.
Home improvement retailer Lowe's posted a profit of 32 cents per share that, while lower than the previous year, beat analyst estsimates. The company also raised both its second-quarter and full-year guidance, sending shares up 11 percent in premarket trading.
But banking continued to be a quandary for the market, as some of the major institutions devise plans to repay government bailout money.
State Street became the latest to add to the list, as the company announced offerings of non-guaranteed senior notes and common stock to help repay Troubled Asset Relief Program funds. Shares dropped 4.5 percet premarket on a belief that the move would be dilutive to current shareholders.
Also in the industry, Bank of America shares gained more than 8 percent premarket after Goldman Sachs added the company to its conviction buy list. Citigroup shares also gained 4 percent, while Wells Fargo was 3.3 percent higher after Warren Buffett's Berkshire Hathaway increased its stake in the bank.
Meanwhile, AIG said it would push ahead with plans to bolster capital through the initial public offering of its Asian subsidiary. The IPO could raise more than $4 billion, according to targets set by AIG executives. Shares gained 3.5 percent premarket.
Shares of some smaller banks moved higher premarket, days after a CNBC.com report said 59 of the institutions outside the government stress tests would need to raise $12.8 billion when subjected to the same conditions as the government stress tests. A Financial Times report Monday put the number at $24 billion. The FT report came from a study it commissioned by Sandler O'Neill while the CNBC.com relied on figures from Keefe, Bruyette & Woods.
Colonial BancGroup shares gained more than 12 percent premarket, while Huntington Bancshares, which KBW said would need $1.6 billion in capital, picked up 7.3 percent.
The financial sector was also in focus in Europe as the chairman of Lloyds Banking Group, Sir Victor Blank, said he would step down next year. Blank came under criticism after the part-nationalized bank took over struggling rival HBOS.
In technology, Nokia launched three new phones that are Internet-equipped but priced on the low end. Shares gained 2 percent premarket.
Economic indicators are few and far between in the early part of the week as investors look ahead to minutes from the last Federal Reserve meeting, due to be released on Wednesday. But the NAHB sentiment index for May is out at 1 pm Monday.
Meanwhile Treasury Secretary Timothy Geithner will speak at the National Press Club Q&A event in Washington, also at 1 am.