Indications: U.S. stock futures bounce higher

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By Steve Goldstein, MarketWatch

LONDON (MarketWatch) -- U.S. stock futures bounced higher Monday on confidence that recent market weakness will dissipate in the face of a wave of earnings as well as merger-and-acquisition speculation.

S&P 500 futures rose 4.2 points to 1,067.30 and Nasdaq 100 futures rose 7.75 points to 1,809.75. Futures on the Dow Jones Industrial Average rose 34 points.

U.S. stocks dropped last week, with the S&P 500 retreating 1.2% as disappointing economic reports -- particularly a consumer confidence gauge released Friday -- offset earnings reports that generally beat analyst expectations.

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"The global recovery appears to have lost some momentum," said Andrew McLaughlin, chief economist at the Royal Bank of Scotland.

The week will see 128 components of the S&P 500 report earnings, and also will feature Federal Reserve Chairman Ben Bernanke testifying on the economy in front of Congress and Europe releasing bank stress test reports.

On Monday, the NAHB's house builders sentiment index for July will be released, and after the close, two key tech-sector reports will come when International Business Machines /quotes/comstock/13*!ibm/quotes/nls/ibm (IBM 128.03, -2.69, -2.06%) and Texas Instruments /quotes/comstock/13*!txn/quotes/nls/txn (TXN 24.77, -0.63, -2.48%) unveil earnings.

At the Farnborough International Airshow, Boeing /quotes/comstock/13*!ba/quotes/nls/ba (BA 61.90, -2.47, -3.84%) said the market for commercial aircraft is coming back.

Overseas, the International Monetary Fund and the European Union withdrew 20 billion euros of financing from Hungary, sending stocks and the forint sliding over 2%. See full story.

Moody's downgraded Ireland's credit rating by a notch, a day ahead of a bond auction by the euro zone member, though the outlook is now stable.

European stocks wavered between gains and losses, as poorly received results from Philips Electronics /quotes/comstock/13*!phg/quotes/nls/phg (PHG 31.94, -1.38, -4.14%) and Electrolux was balanced by merger-and-acquisition related gains. International Power jumped after disclosing talks with GDF Suez and British engineering firm Tomkins rallied on a 2.9 billion pound ($4.5 billion) bid from Onex and a Canadian pension fund.

Asian equities declined, with the S&P/ASX 200 falling 1.5% and the Hang Seng down 1% as Japanese markets were shut for a holiday.

The dollar gained against the Japanese yen, while oil futures slipped marginally.

Steve Goldstein is MarketWatch's London bureau chief.

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