Futures Tick Higher After Economic Report

Stock index futures rose ahead of the open Monday after a report showed personal income rose in April and investors largely shrugged off the General Motors bankruptcy filing.

Personal income rose 0.5 percentin April, helped by the Obama stimulus package, though spending slipped 0.1 percent. The personal savings rate jumped to 5.7 percent from 4.5 percent in March and the highest increase since 1995.

The rise in income and drop in spending means consumers, despite their newfound confidence, aren't translating that confidence into spending. Still, economists had expected income to fall and the drop in spending was a slower pace than in March.

Still to come: April construction spending is due out at 10 am ET, as is the May ISM manufacturing index.

The major indexes racked up a gain for the month of May, marking the third positive month in a row, as the momentum of the recent rally held.

As expected, GM filed for bankruptcy protection this morning as part of a plan that will see US taxpayers taking a 60 percent stake in the company.

President Barack Obama will address these developments in a speech at around 11:30 am, while General Motors officials will hold a news conference detailing the latest events at about noon.

Shares of GM slumped over 30 percent to 75 cents Friday. Shareholders are expected to be wiped out after the Chapter 11 filing.

As GM prepared to enter bankruptcy, Chrysler looked for the exits, only one month after filing for Chapter 11 itself. Bankruptcy Court Judge Arthur Gonzalez cleared the sale of Chrysler's assets to Fiat-led group for $2 billion.

Fiat will control 20 percent of the assets, a health-care trust aligned with the United Auto Workers union will control 68 percent and the U.S. and Canadian governments will control the remaining 12 percent.

On the flip side, Ford was benefiting from the turmoil in the industry and said it plans to increase production 10 percent this year to make up for slowdowns in the industry. The company's shares gained 4.3 percent in premarket trading and have been on a bit of a tear lately, rising about 17 percent in the past two weeks.

Generally, investors remain optimistic that stocks will continue to rise as long as the government can keep a lid on Treasurys yields. A 30-year bond yield under 5 percent will keep investors in equities, John Brady of MF Global told CNBC.

Should 30-year yields eclipse that point, "It will reintroduce volatility into the equity markets in a meaningful way," Brady said.

In the meantime, though, the market's main fear gauge, the Chicago Board Options Exchange's Volatility Index, continues to slide, falling below the critical 30 level that generally indicates high anxiety.

Elsewhere, shares of Irish biotech Elan gained more than 11 percent premarket on news that it was looking into selling a minority stake to Bristol Myers Squibb. Bristol Myers stock also was up about 5 percent.

ArcelorMittal rose more than 6 percent following news that the steelmaker had reached a deal with workers in Kazakhstan for three-month pay reductions that eliminated the need for mass layoffs. The company already has laid off about 1,000 of its American workers in a move to cut costs.

Asian stocks closed firmly higher as strong data from China’s manufacturing sector boosted basic resources stocks. And European indexes followed the Asian market higher.