Stocks poised to move higher at the opening

Visa's $18 billion IPO to set record
February 25, 2008 5:12:12 AM PST
Stocks headed for a higher opening Monday, with investor sentiment bolstered by news of a record $18.8 billion stock offering by Visa Inc and a renewed $2 billion offer from videogame maker Electronic Arts for rival Take-Two.The market for new deals and initial public offerings has been quiet lately, so Wall Street is likely to get a boost from these developments. Takeover offers and IPOs often cause investors to buy stocks in related sectors; they're also seen as a sign of growing confidence in the economy.

Visa Inc. disclosed in a government filing early Monday that it estimates it will raise up to almost $18.8 billion from its upcoming initial public offering. That would make it the biggest U.S. IPO in history.

The market got some help late in the session Friday from speculation that ailing bond insurer Ambac Financial Group Inc. will line up funding early this week, and investors will continue to monitor that situation on Monday.

The futures contract for the Dow Jones industrial average rose 24 points, or 0.2 percent, to 12,419. Futures contracts for the Standard & Poor's 500 gained 2.10 points, or 0.1 percent, to 1,357.6 and the Nasdaq 100 advanced 1.5 points, or 0.1 percent, to 1,782.5.

Despite continuing volatility, the stock market has traded in a range this month as investors hedge their bets as to whether troubled credit markets and the overall economy have stabilized.

Last week, the Dow inched up 0.27 percent, the S&P 500 index rose a modest 0.23 percent and the Nasdaq composite index dipped 0.79 percent. But the three indexes are all down sharply since the start of 2008.

There was good news for cancer drug manufacturer Genentech Inc. The Food and Drug Administration granted an accelerated approval for its Avastin treatment, which is administered with a chemotherapy treatment to breast cancer patients.

Home improvement retailer Lowe's Cos. reported a drop in fourth quarter earnings and cited the weak housing market. The company's quaterly earnings skided to 28 cents a share from 40 a year before, although the result was above the Thomson Financial estimate.

Later in the morning, the National Association of Realtors' existing home sales report for January will be released. Investors have become used to bad news about the housing sector but the report nonetheless could upset the market if it's particularly disappointing.

The Thomson/IFR estimate is that 4.85 million homes were sold last month, which would be a decrease from a record low of 4.89 million in January.

The association said earlier this month it expects "soft market conditions" for several more months, but forecasts that the housing market will improve in the second half of this year.

Treasurys were under pressure, as the yield on the benchmark 10-year note, which moves inversely to price, rose to 3.84 percent from 3.80 percent. Oil futures also were under a touch of pressure.

There were solid gains in overseas markets. In Tokyo the Nikkei closed 3.07 percent higher. In London, the FTSE 100 rose 1.75 percent, while Paris' CAC 40 advanced 1.85 percent and Frankfurt's DAX gained 1.28 percent.