U.S. stock futures flatten out; Genentech, Take-Two surge - MarketWatch

Pre MArket; Genentech, Take-Two surge - MarketWatch


ields on 10-year Treasury bonds edged slightly higher to 3.84%. Oil futures fell 23 cents to $98.58 a barrel, while gold futures edged $1.10 higher to $948.90 an ounce.

The housing market will be back in the spotlight with home improvement chain Lowe's Companies (LOW:

LOW) reporting a 33% profit fall amid "challenging" conditions, and, at 10 a.m., data on existing-home sales for January.

Dimitry Fleming, an economist at ING in Amsterdam, noted that since the end of the summer, the traditionally close link between pending-home sales and existing-home sales has become less tight.

"People walking away from the buying process after signing a contract seems to be the obvious reason for this disconnect. Maybe they got cold feet, but given the timing of the start of the divergence (the outbreak of the credit crunch) and the cost of running away, it is more likely that people simply failed to secure funding," he said. He expects home prices to fall much further, which will put pressure on the Fed to cut another half-point from its key rate level in March.

Speeches will come from Federal Reserve Governors Randall Kroszner and Frederic Mishkin as well as European Central Bank President Jean-Claude Trichet, and there are auctions of two- and five-year Treasury notes.

Genentech (DNA:

DNA

) surged 8.9% in pre-open trade after the U.S. Food and Drug Administration granted an accelerated approval for Avastin, in combination with paclitaxel chemotherapy, for the treatment of patients who have not received chemotherapy for their metastatic breast cancer.

Analysts were surprised by the decision. "We believed there was only a 40% chance of FDA approval given the tone of the (Oncology Drugs Advisory Committee) panel proceedings in December of 2007. This positive news means that Genentech now regains the key Avastin growth driver for 2008," said Michael King, an analyst at Rodman & Renshaw who upgraded the stock to market outperform from market perform.

Electronic Arts Inc. (ERTS:

ERTS) on Sunday unveiled a $2 billion unsolicited bid to buy Take-Two Interactive Software Inc. (TTWO:

TTWO) -- its second offer in recent weeks, and one that again was rebuffed by the maker of Grand Theft Auto video games. Take Two surged 48% to $25.75 in pre-open deals.

Deutsche Bank lowered ratings for General Motors (GM:

GM) and BorgWarner (BWA:

BWA) , sending both to hold from buy on fears the cyclical North American downturn could be deeper and more protracted than previously expected. GM was unchanged in pre-open moves.

Visa said it could raise up to $18.76 billion in an initial public offering, adding it was ahead of MasterCard (MA:

MA