Reaching for a rally

NEW YORK (CNNMoney.com) -- Stocks look poised to continue Monday's rally ahead of the latest round of economic reports, as a major builder said the housing slump may have bottomed out.

Stock futures were mixed in early trading, although a comparison to fair value, which predicts the direction of stocks at the open, pointed to a gain.

At 8:30 a.m. the government will revise its reading on productivity and unit labor costs in the third quarter. Economists surveyed by Briefing.com forecast that productivity, an important curb on inflation pressures, will be revised up to a 0.5 percent gain from an unchanged reading in the initial estimate.

At 10 a.m. the government will also report on factory orders in October, while the Institute of Supply Management will report its survey of executives outside of manufacturing to give its reading on the strength of growth in the services sector.

The pace of job cutting is at its lowest level since 2000, according to the monthly report from outplacement firm Challenger, Gray and Christmas, as even a new flood of job cuts from the auto sector left total layoff announcements in November down 23 percent from year-earlier levels.

The report comes ahead of Friday's much-anticipated November employment report from the Labor Department, in which economists are forecasting a slight improvement in net hiring by U.S. employers, even as the unemployment rate is expected to edge up to 4.5 percent from the 4.4. percent seen in October.

One of the more hopeful economic outlooks Tuesday could be the guidance from luxury home builder Toll Brothers (Charts), whose chairman and CEO said it appears the housing slump has bottomed out. The nation's No. 6 home builder reported fiscal fourth-quarter earnings that was sharply lower, although it beat forecasts by a penny a share. The company's guidance for 2007 also called for lower results.

Ford Motor (Charts) announced plans to sell $3 billion of 30-year bonds that can be converted into the company stock, one of the largest sales of the stock-bond hybrids this year. Shares of Ford lost 2.4 percent in after-hours trading on the news.

Property owner Reckson Associates Realty (Charts) rejected the $4.3 billion takeover offer from billionaire financier Carl Icahn, saying the bid wasn't better than an offer from rival office landlord SL Green Realty (Charts). It intends to go ahead with a shareholder vote on the SL Green offer Wednesday.

Microsoft (Charts) remains on track to achieve revenue growth of 13 to 15 percent in fiscal 2007, with sales of its new Vista software product likely to be a key contributor, The Wall Street Journal reported, citing comments Tuesday by the company's chief financial officer.

Yum Brands (Charts) meets with analysts Tuesday as one of its fast-food chains, Taco Bell, has been forced to close stores in New York and New Jersey after dozens of patrons were sickened by an outbreak of e coli.

Oil prices rose above the $63 a barrel mark in early trading. U.S. crude was up 75 cents at $63.19 a barrel, while Brent crude futures gained 58 cents to $64.03.

Treasury prices were slightly lower ahead of Tuesday's economic reports, taking the yield on the benchmark 10-year note to 4.43 percent from 4.42 percent late Monday.

The dollar was stronger against the euro but weaker against the yen.

Stocks closed mixed in Asia, with indexes in Japan, South Korea and Taiwan losing ground while Hong Kong's Hang Seng and a broad index of Asian stocks outside Japan rose. Major indexes in Europe were narrowly higher in early trading.

More market news and futures ahead of U.S. open