Big rally seen at Wall St. start

NEW YORK (CNNMoney.com) -- U.S. stocks were poised for a big opening rally to start 2007 trading Wednesday as investors prepared to pour fresh money into markets coming off a big year.

At 7:13 a.m. ET, Nasdaq and S&P futures were sharply higher.

U.S. light crude oil was 61 cents lower at $60.44 a barrel in electronic trading.

Treasury prices were little changed, with the 10-year note yield holding steady at around 4.68 percent. The dollar was higher against the euro and the yen.

News over the four-day market holiday, which was extended by the funeral for former President Ford, could affect stocks at the start of trading. Art Hogan, chief market analyst at Jefferies & Co., said U.S. futures are probably being helped by gains posted in overseas markets on Tuesday.

"We're playing a little catch-up," he said. "Markets across the globe had a pretty good day yesterday. And Wal-Mart's commentary over the weekend suggests we're looking at the Christmas shopping season being better than expected. In general, it's a start of the new year and a new influx of cash."

Wal-Mart Stores (Charts) said sales for the crucial holiday period grew by about 1.6 percent at stores open at least a year, a better-than-expected sales gain. Final figures are due Thursday.

The world's largest retailer will start moving many of its 1.3 million workers from predictable shifts to a system based on how many customers are in stores at a given time, according to a report in the Wall Street Journal.

Home Depot (Charts), the No. 1 home improvement retailer, announced Wednesday its CEO Robert Nardelli has resigned and will be succeeded by Frank Blake, the company's vice chairman of the board of directors. Shares rose more than 6 percent in pre-market trading.

Lennar (Charts), one of the nation's largest home builders, warned for the second time that its earnings in the fiscal fourth quarter would fall short of forecasts, and that charges related to writedowns and revaluations of assets would cause it to post a net loss in the period.

It also said it has yet to see a sign of recovery in the battered home building market.

Citigroup downgraded online retailer Amazon.com (Charts) on Wednesday to a "sell" recommendation from "hold," as it gave a 12-month price target for shares at $34. Shares of Amazon, which closed Friday at $39.46, were down 1.4 percent in early trading in Frankfurt on the downgrade.

Starbucks (Charts) announced it would eliminate transfat from half of it stores starting Wednesday, and the other half of its stores later this year. transfats have been blamed for causing an increase in artery-clogging cholesterol.

Canadian steelmaker Harris Steel Group said Tuesday it agreed to be purchased by U.S. steelmaker Nucor (Charts) for $1.1 billion, a 6 percent premium from its closing price Friday.

Dash Navigation, an in-car global positioning satellite service, announced Wednesday it is teaming up with Yahoo! (Charts) to let its clients Yahoo Local for nearby products, services or businesses from their cars.

Automakers are due to report December sales Wednesday, with Ford Motor (Charts) forecast to report a nearly 20 percent drop in sales compared to a year earlier, and DaimlerChrysler (Charts) and General Motors (Charts) forecast to post more modest declines.

Toyota Motor (Charts) is one of the few automakers expected to post gains, and it is likely to top Ford once again for the No. 2 spot in U.S. sales.

DaimlerChrysler announced late Friday that it had signed an agreement with Chinese automaker Chery to import subcompact cars made in China to the United States for sale under the Chrysler brand name.

At 10 a.m. ET the Institute of Supply Management will release its manufacturing index for December. The index fell below the 50 mark which indicates the tipping point between growth and contraction in the sector in November, ending a streak of 41 straight months of signaling growth.

Economists surveyed by Briefing.com forecast that the index will edge back up to the 50 mark from 49.5.

Also at 10 a.m. the Census Bureau is due to report on construction spending in November. Economists are forecasting a 0.6 percent decline in the month, a slight improvement from the 1 percent drop in October.

The Federal Reserve will release its minutes of its Dec. 12 meeting at 2 p.m. ET. Investors will be looking for clues as to whether the Fed will leave rates unchanged or start to cut rates in its upcoming meetings.

Overseas, markets in Asia closed mostly higher, with indexes in Hong Kong and Singapore hitting record highs before retreating slightly. Markets in Japan were closed for a holiday, though. Markets in Europe were narrowly lower in early trading.

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