May could start with rebound

NEW YORK (CNNMoney.com) -- U.S. markets are ready to begin a new month Tuesday, poised to rebound a bit from the selloff that diminished an otherwise solid April.

At 7:27 a.m. ET, Nasdaq and S&P futures were higher.

Oil was lower. U.S. light crude eased 5 cents to $65.66 a barrel in electronic trading.

Treasury prices were little changed, with the yield on the 10-year note at 4.62 percent. The dollar also was little changed against the euro and the yen, after being higher in earlier trading.

Economic reports due Tuesday include the Institute of Supply Management's manufacturing index as well as the National Association of Realtors report on pending home sales, both due at 10 a.m. ET.

Art Hogan, chief market analyst at Jefferies & Co., said that as long as the ISM manufacturing index stays above 50, an indication of growth in the sector, it shouldn't have a big effect on the market. Economists surveyed by Briefing.com are forecasting the index will edge up to 51 from 50.9 in March. He said in terms of economic reports, investors are already looking ahead to Friday's April employment figures.

But Hogan said what has been lifting the market has been a generally strong earnings period, which continued Tuesday when the nation's No. 1 consumer products maker Procter & Gamble (Charts, Fortune 500), a Dow component, reported an 18 percent jump in earnings that met forecasts and the upper end of its guidance for the recently completed quarter. It also raised the lower end of its full-year earnings guidance.

"It's a solid report," Hogan said about P&G. "For the whole earnings season, we always tend to be low, but not to the magnitude we have been in this quarter. That's been the big driver lifting stocks. After a bit of a breather yesterday, the market can probably continue its path of least resistance to the upside."

Many overseas markets were closed for the May Day holiday. Among the few major markets open, Japan's Nikkei ended lower, while London's FTSE was down in early trading.

In corporate news, electronics retailer Circuit City (Charts, Fortune 500) warned that it is now expecting a loss from continuing operations for the first quarter that ended in April, as it withdrew its previously issued outlook for the first half of its fiscal year. Shares of the company fell 10 percent in after-hours trading on the news.

Wal-Mart Stores (Charts, Fortune 500) was criticized late Monday by Human Rights Watch, which charged that the No. 1 retailer has used a myriad of tactics, including some that are illegal, to hinder the ability of its workers to form labor unions. The company denied the charges, saying they were based on unsubstantiated allegations.

According to a report in the Wall Street Journal, activist shareholder Carl Icahn has stepped up his efforts to win a seat on the board of Motorola (Charts, Fortune 500), sending a letter to shareholders calling the company trouble and likening reported comments by CEO Ed Zander to "something straight out of Alice in Wonderland."

VeriSign (Charts) is expected to announce a deal to create bank cards that display a password that changes several times a minute, a device that could improve the security of online accounts.

Automakers are also due to report U.S. sales for April, with Ford Motor (Charts, Fortune 500) warning late Friday that sales would be far below internal targets.

The Dow Jones industrial average ended a 3-day run of record closes Monday with a 58-point loss. Nevertheless, the blue-chip measure gained 5.7 percent in April, its best one-month percentage gain in 3-1/2 years.

The Nasdaq composite, which lost 1.3 percent Monday, was up 4.3 percent last month, as was the Standard & Poor's 500, which was down 0.8 percent in Monday trading.