3 October 2005, 17:23  U.S. stocks are set to usher in the fourth quarter on a muted note

U.S. stocks are set to usher in the fourth quarter on a muted note, with futures pointing to a flat-to-higher open Monday as investors mulled a raft of deals while awaiting key manufacturing data. Dow futures were down 2 points at 10,610, Nasdaq 100 futures rose 2 points to 1,616 while S&P 500 futures climbed 0.7 point to 1,235. "The market is going to concentrate on the ISM manufacturing index, which is likely to be the driving force behind today's stock action," said Peter Cardillo, chief market analyst at S.W. Bach. Looking ahead to the rest of the week, Cardillo said the market will most likely be rangebound with a bias to the upside ahead of the September employment report due out on Friday. "This will give us a good insight into the effect of the hurricanes." On Friday, stocks ended higher as the Dow Jones Industrial Average posted its first gain for the month of September in seven years and all three major averages realized gains for the third quarter. The Dow industrials closed up 15.92 points at 10,568.70. The Nasdaq Composite Index closed up 10.47 points at 2,151.69 while the S&P 500 Index rose 1.13 points at 1,228.81. On a historical basis, investors can hope for a positive fourth quarter for stocks. The Dow Jones Industrial Average has posted fourth-quarter gains for the last seven years. Both the Nasdaq Composite and the S&P 500 Index meanwhile have gained for the last four years in a row. But current sentiment is being hurt by the uncertainty over the financial and economic impact of Hurricanes Katrina and Rita and high energy prices. Crude-oil prices were flat in the early going as traders continued to focus on supplies and U.S. refining capacity in the hurricane-battered Gulf of Mexico. Crude for November delivery was last unchanged at $66.24 a barrel in electronic trading. Natural-gas futures rose 7.90 cents to $14 per million British thermal units. The dollar firmed against rivals on heavy demand for the greenback at the start of the fourth quarter and following a disappointing reading of Japan's Tankan survey, a key measure of business conditions. The euro eased 0.8% to $1.1929. Against the Japanese yen, the greenback rose 0.5% to 114.01. In a heavy week for data, investors will receive the latest snapshot on the health of the nation's manufacturing sector when the Institute for Supply Management releases its monthly index tracking factory output, at 10 a.m. Eastern Time. The ISM index is forecast to come in at 51.7% for the month of September, down from 53.6% in the prior month, according to economists polled by MarketWatch. Any reading over 50% however does indicate expansion.

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