Stocks aim to keep rally going

LONDON (CNNMoney.com) -- Wall Street looked set to kick the week off with a positive open on Monday, buoyed by a rally in Asia and merger chatter.

At 7:30 a.m. ET, futures were higher, pointing to a positive opening for U.S. stocks.

Asian shares rallied, with Japan's benchmark Nikkei index rising to a three-month high. In Europe, stocks were mixed in midday trading.

U.S. stocks rebounded last week after encouraging inflation readings and easing bond yields helped investors shake off concerns about rising interest rates.

The major gauges have advanced the past three sessions, boosted by the bullish sentiment that has recently driven stocks to record highs.

Analysts say while investor worries about the global interest rate outlook may be waning, they could easily resurface - and lead to more volatility for a market already due for a rest. (Full story)

In major corporate news, mining group BHP Billiton is reconsidering a takeover bid for aluminum producer Alcoa, the Times of London reported.

GE (Charts, Fortune 500) and media publishing firm Pearson (Charts) reportedly are considering challenging News Corp.'s (Charts, Fortune 500) $5 billion bid for Dow Jones. According to published reports, the proposed plan would let the Bancroft family, which currently controls Dow Jones (Charts), keep an interest in the company.

Boeing (Charts, Fortune 500) rival Airbus is finding support at the Paris Air Show. Airlines placing orders for Airbus jets include US Airways (Charts, Fortune 500), which signed a deal with EADS, parent company of Airbus, valued at $8 billion.

No major economic reports are due Monday, but the latest reading on the housing sector will come tomorrow. Reports on housing starts and building permits are due Tuesday.

Bond prices edged higher, taking the benchmark 10-year yield down to 5.14 percent from 5.16 percent late Friday. Bond prices and yields move in opposite directions.

Oil prices fell slightly, with the U.S. light crude for July delivery easing 16 cents to $67.84 a barrel in electronic trading.