Indications: U.S. stock futures point to strong 2010 debut

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By Steve Goldstein, MarketWatch

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LONDON (MarketWatch) -- U.S. stock futures Monday pointed to a strong debut to 2010 as the Federal Reserve's top two officials hinted that interest rates would stay at ultra-low levels for months to come.

After a year that saw the Dow Jones Industrial Average climb 19% on a recovery in the economy and a stabilization of the financial sector, futures on the Dow industrials rose 54 points.

S&P 500 futures rose 7 points to 1,117.70 and Nasdaq 100 futures rose 21.75 points to 1,880.50.

The gains came as Federal Reserve Chairman Ben Bernanke said in a speech Sunday that regulatory and supervisory policies, rather than monetary policy, were to blame for a rapid increase in U.S. house prices in the early parts of last decade, and Fed Vice Chairman Donald Kohn said that tightening policy to head off perceived threats from asset price increases "could be expensive."

"While we disagree with much of the content of the speeches, these comments should reiterate (yet again) that the Fed will not seek to tighten policy until economic slack is, or looks likely to be, significantly reduced and/or inflation expectations pickup," said a research note from RDQ Economics.

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Overseas, China's manufacturing activity accelerated in December at its fastest pace in several years, according to data compiled by two competing industrial surveys. A similar gauge for Britain showed the quickest expansion in 25 months.

The Institute for Supply Management's December manufacturing index is due at 10 a.m. Eastern time, and is expected to show an increase to 54% from 53.6%, according to economists polled by MarketWatch. Construction spending data also are due for release.

Alcon /quotes/comstock/13*!acl/quotes/nls/acl (ACL 164.35, 0.00, 0.00%) may be active as Novartis /quotes/comstock/13*!nvs/quotes/nls/nvs (NVS 54.43, 0.00, 0.00%) offered to buy out minority holders of the eye-care firm for $11.2 billion -- at $153 a share, a 7% discount to Thursday's close. Novartis separately exercised an option to buy Nestle's remaining 52% stake for $28.1 billion.

Alcon rose 3% to $169.50 on hopes for a better Novartis offer.

Chesapeake Energy /quotes/comstock/13*!chk/quotes/nls/chk (CHK 25.88, 0.00, 0.00%) rose 4.9% after it inked a $2.25 billion pact with Total /quotes/comstock/13*!tot/quotes/nls/tot (TOT 64.04, 0.00, 0.00%) to sell a 25% stake in Barnett shale gas assets.

Kraft Foods /quotes/comstock/13*!kft/quotes/nls/kft (KFT 27.18, 0.00, 0.00%) may be in the spotlight after two newspaper reports said it would increase its hostile offer for Cadbury /quotes/comstock/13*!cby/quotes/nls/cby (CBY 51.39, 0.00, 0.00%) , and an Italian newspaper said Ferrero has met with private-equity firms and Hershey /quotes/comstock/13*!hsy/quotes/nls/hsy (HSY 35.79, 0.00, 0.00%) about jointly launching a counter-offer.

The media sector may be in the spotlight after News Corp.'s /quotes/comstock/15*!nws/quotes/nls/nws (NWS 15.92, 0.00, 0.00%) Fox Network and Time Warner Cable /quotes/comstock/13*!twc/quotes/nls/twc (TWC 41.39, 0.00, 0.00%) reached a deal to keep the Fox broadcast network on the air over the Time Warner network. News Corp. also owns MarketWatch, the publisher of this report.

Wal-Mart Stores /quotes/comstock/13*!wmt/quotes/nls/wmt (WMT 53.45, 0.00, 0.00%) plans to cut costs by combining purchasing for several countries, according to a Financial Times report citing the head of Wal-Mart's U.S. stores, Eduardo Castro-Wright.

Commodity futures were strong, with oil futures climbing to around the $81-a-barrel mark and gold futures rising by $21 an ounce.

The dollar index fell 0.5%, while stocks in Europe and Asia rose, with the Nikkei 225 climbing 1% in Tokyo and the FTSE 100 up 0.7% in London.

Steve Goldstein is MarketWatch's London bureau chief.