Indications: U.S. stock futures point to Wall Street rebound

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By Barbara Kollmeyer, MarketWatch

MADRID (MarketWatch) -- U.S. stock futures were pointing to a rebound on Monday, after last week's bruising close which some say was overdone and as a heavy week of political, economic and corporate events lines up for investors.

Futures for the S&P 500 were up 11.3 points to 1,102.30, while those for the Dow Jones Industrial Average rose 91 points to 10,242. Futures for the Nasdaq 100 rose 12.5 points to 1,810.

U.S. stocks fell sharply on Friday, with the Dow Jones Industrial Average suffering its worst week on a percentage basis -- losing 4.12% -- since March, and its biggest one-day drop since October 30. Those losses came as earnings from American Express, Google and others fell short of investors' lofty expectations and as the market continued to fret over U.S. bank restrictions proposed by President Barack Obama and monetary tightening from China.

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"I think Friday's fall (on Wall Street) was overdone, and I don't think such a U.S. bank restriction would stop economic recovery and earnings improvement in various emerging markets," said Lee Jin-woo at Mirae Asset Securities in Seoul.

This week markets are facing a clutch of key events that could map out market direction. Included in a lengthy lineup of political, economic and corporate events, is a Fed interest rate decision and President Obama's State of the Union address, both on Wednesday. The Davos economic summit also begins Wednesday.

"Our central assumption is that markets are undergoing a needed wash-out before they can make further progress," said strategists at J.P. Morgan Asset Management. "Nevertheless, their anxieties relate to the outlooks for growth and liquidity and upcoming corporate and economic releases will need to provide reassurance that the global economy is successfully continuing its convalescence."

Also weighing on the minds of investors last week is the fate of Fed Chairman Ben Bernanke. Stocks could see some support from news flow over the weekend that was more assuring over Bernanke's reappointment, with a vote due at the end of the week.

On the economic calendar, existing home sales for December, is due for release at 10 a.m. Eastern. A heavy schedule of data will pack out the rest of the week, which ends with fourth quarter gross domestic product data on Friday.

Stocks in focus for Monday will include Halliburton /quotes/comstock/13*!hal/quotes/nls/hal (HAL 31.15, -1.38, -4.24%) before the market opens and later Apple Inc. /quotes/comstock/15*!aapl/quotes/nls/aapl (AAPL 197.75, -10.32, -4.96%) , with quarterly results due for both.

In Europe, shares moved off their worst levels, helped by banks and miners. Shares of Phillips Electronics /quotes/comstock/13*!phg/quotes/nls/phg (PHG 28.26, -0.79, -2.72%) rallied in Amsterdam as the conglomerate swung to a profit, while shares of Ericsson /quotes/comstock/15*!eric/quotes/nls/eric (ERIC 9.83, +0.07, +0.72%) fell in Stockholm after the telecom equipment maker reported a 92% drop in fourth-quarter profit as sales fell.

Asia stocks mostly fell, led by financials as markets reacted to Friday's Wall Street swoon.

The dollar slipped against the euro on Monday as fears over Bernanke's reappointment relaxed. Crude oil futures were flat at $74.54 a barrel, while gold was up by nearly $14 an ounce.

Barbara Kollmeyer is an editor for MarketWatch in Madrid.