Dow to Make a Strong Start

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LONDON -- The Dow Jones Industrial Average (INDEX: ^DJI) is likely to make a positive start to the week after the long weekend, as are the S&P 500 and Nasdaq indexes. The futures market is suggesting a rise of between 0.5% and 1% for all three indexes when trading begins.

Economic data due out today includes the Case-Schiller Home Price Index for March, which is expected to show a 0.3% increase, a slight improvement on February's 0.2% rise. Also due is the Consumer Confidence Index for May, which may show a slight improvement on April's reading. Positive results on both of these indexes could help boost traders' confidence, but a lack of major economic data or company earnings may mean that attention focuses once more on Europe and Asia.

In Asia, hopes that the Chinese government will launch a package of stimulus measures remains strong, and it helped buoy Asian and London markets today, with the main Asian markets closing up slightly. The FTSE 100 (INDEX: ^FTSE) made a strong start but gradually gave back its gains, finishing the morning virtually unchanged. The Greek, Spanish, and Italian stock markets all fell, although the German DAX bucked the trend, ending the morning up about 0.6%.


At an auction of Italian six-month bonds this morning, yields rose to 2.104%, up from 1.772% in April, signalling that investors remain wary over eurozone problems.

U.K. companies on the move included mega-miners BHP Billiton (NYS: BBL) and Rio Tinto, which rose strongly in London trading this morning, as did Intercontinental Hotel Group (NYS: IHG) .

Elsewhere in Europe, ArcelorMittal rose by 2% following a broker upgrade, while beleaguered Spanish bank Bankia SA continued yesterday's decline, falling a further 13%. The markets are awaiting news on how Bankia's latest rescue package is going to be arranged; the bank revealed on Friday that it needs a further injection of 19 billion euros in new capital to make good its bad debts.

Meanwhile, Warren Buffett-backed Chinese electric automaker BYD is in the news following a controversial crash involving one of its electric cars. Billionaire investor Buffett rarely invests outside the U.S., but one deal that did catch the market's attention recently was his $1 billion purchase of shares in a U.K. blue-chip brand with global expansion potential. You can discover the identity of the company and the price he paid in this special free report.

There are no major earnings releases due today, but smaller companies due to report include Sanderson Farms (NYS: SAFM) and fashion retailer Quiksilver.

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