Deals could power Wall Street

NEW YORK (CNNMoney.com) -- U.S. stocks were ready to open higher early Friday as deals or talk of deals gave some lift to investors.

At 8:40 a.m. ET, Nasdaq and S&P futures were solidly higher.

In the health care devices industry, Philips (PHG) of the Netherlands said it has agreed to acquire Respironics (RESP), which specializes in ways to combat sleep disorders, for $5.1 billion.

Merrill Lynch (MER, Fortune 500), one of the troubled investment banks that has soured Wall Street in recent weeks, is reported by The Wall Street Journal to be in talks for a $5 billion investment from Singapore's state investment firm, Temasek Holdings.

Electronics retailer Circuit City (CC, Fortune 500) reported a much wider-than-expected third-quarter loss Friday that the company blamed on its ongoing store reorganization and double-digit sales declines of gadgets like camcorders, DVD players and video imaging systems.

And insurance broker Marsh & McLennan (MMC, Fortune 500) said it is looking to replace its chief executive after concerns over the company's recent financial performance.

On the economic front, personal income and spending for November came in higher than expected, but inflation also crept up for the year.

Personal income rose 0.5 percent in November, compared to forecast growth of 0.4 percent. Personal spending rose 1.1 percent, compared with a 0.6 percent rise forecast.

Inflation, excluding food and energy costs, rose 0.2 percent in November, as expected. But for the year core inflation is now running at 2.2 percent, higher than the 2 percent expected.

Oil prices were higher, with U.S. light crude up 33 cents to $91.39 a barrel in Asian electronic trading.

Asian markets finished higher, with Tokyo's Nikkei index up 1.5 percent on talk of a Toshiba-Sharp partnership in liquid crystal displays. European stocks gained ground in early trading.

A report on consumer sentiment is due at 10 ET.

Investors will also likely keep an eye on the Federal Reserve, which is set to announce the results of its second auction of short term loans to banks.

The Fed is lending up to $20 billion to banks in an attempt to help alleviate the credit crunch on Wall Street.