Stocks are set to slip at Monday's open as investors digest the strong gains on Friday that were spurred by a huge jump in jobs creation and await a fresh taste of earnings results due later this week. Tobacco maker Altria Group was in the spotlight after the European Commission and Altria unit U.S. tobacco company Philip Morris said they are negotiating a $1 billion payment to end a dispute over cigarette smuggling. Siebel Systems Inc. was also likely to be in focus after it said on Friday its first-quarter earnings would meet or beat the high end of its previous forecast ranges on higher software license revenue as the company attracted new customers. But Wall Street's tone was cautious ahead of the first-quarter earnings season's first real batch of earnings reports from corporate heavyweights, including Alcoa Inc. , General Electric and Yahoo Inc. . Standard & Poor's 500 stock index futures for June were off 3.30 points at 1,138.80, while Nasdaq futures for the same month were down 5.50 points at 1,489.50.
The market ended last week's final session sharply higher after a U.S. government report showed employment grew at its fastest pace in almost four years last month, surging past expectations. Friday's jobs data reassured investors the economic recovery remains on track, but also stirred speculation that the Federal Reserve might need to hike interest rates sooner than anticipated. "The market will continue to be in a tug of war between, on one had, the improving economy, as evidenced by Friday's number and, on the other hand, the prospect of the Fed raising rates sooner than later," said Peter Boockvar, equity strategist at Miller Tabak & Co. "The market has difficulties rallying in the face of a rate hiking cycle, which is what we may be embarking upon." More news on the economic front is expected Monday morning, with the Institute for Supply Management scheduled to release its monthly non-manufacturing survey at 10 a.m. EDT (1400 GMT). The closely watched gauge of the services sector is expected to show a rise to 61.5 in March from 60.8 in February. Among other stocks to watch was J.C. Penney Co. , which has agreed to sell its Eckerd drug-store unit to two competitors for $4.4 billion, according to sources close to the situation, ending a prolonged auction that will leave it flush with cash for its core department-store operations.
Cordis Cardiology, a division of Johnson & Johnson Co.'s Cordis Corp., said on Friday that it received a warning letter from the U.S. Food and Drug Administration (FDA) over an inspection of manufacturing sites for its coronary stents. Health insurer WellChoice Inc. is negotiating to buy Oxford Health Plans Inc. in an all-stock deal to create a healthcare giant in the Northeast part of the United States, the Wall Street Journal said on Monday. In Asia, Tokyo's Nikkei average <.N225> rose 1.2 percent to end at a new 22-month high on Monday as strong U.S. jobs data pushed up the dollar against the yen, triggering buying in Sony Corp and other high-techs. European shares, however, hung near the unchanged mark as hopes that companies such as SAP will report strong quarterly profits were offset by weakness in UK bank shares prompted by worries interest rates may soon rise. In U.S. trading on Friday, strong jobs data catapulted stocks higher, pushing the three major market indexes to their biggest weekly percentage gains since October 2003. The Dow Jones industrial average <.DJI> ended up 97.26 points, or 0.94 percent, at 10,470.59. The Standard & Poor's 500 Index <.SPX> rose 9.63 points, or 0.85 percent, to 1,141.80. The technology-laced Nasdaq Composite Index <.IXIC> gained 42.16 points, or 2.09 percent, to 2,057.17. For the week, the blue-chip Dow rose 2.5 percent, while the Nasdaq gained almost 5 percent. The S&P 500 gained 3 percent, ending a three-week long losing streak.///