Stocks set to rebound

NEW YORK (CNNMoney.com) -- U.S. stock futures rose early Monday as investors eyed a comeback from the previous session's brutal selloff and crude prices extended their declines.

At 7:33 a.m. ET, Nasdaq and S&P futures were higher, suggesting gains at the start for Wall Street.

Stocks tanked on Friday, sending the blue-chip Dow lower about 2 percent, after a surge in the unemployment rate and weak jobs data fueled anxiety about a recession in the U.S.

Art Hogan, chief market analyst at Jefferies & Co., said he believes the rally in futures early Monday is due simply to the markets being oversold last week when a holiday-shortened trading week resulted in a low-volume sell-off.

"Regardless of the magnitude of our concern about the state of the economy, the punishment isn't fitting the crime," he said.

The prospect of a U.S. downturn also raised hopes the Federal Reserve will aggressively cut rates when it meets later this month. Hogan said there is even some hopes on the street that the Fed might cut rates ahead of its regularly-scheduled Jan. 30 meeting.

Lower oil prices helped support the brighter mood. U.S. light crude slid in electronic trading early Monday after crossing the $100 a barrel threshold last week. A barrel of light sweet crude lost 43 cents to $97.48 a barrel.

But while futures here were a bit higher, Asian stocks finished sharply lower on fears of a U.S. recession and weak auto sales in Japan. European markets edged slightly higher in early trading.

On the economic calendar, President Bush is due to speak about the economy later today. His speech comes amid word the White House is considering new measures to boost the economy to ward off a recession.

Treasury Secretary Hank Paulson is also speaking this afternoon. He will discuss the capital markets and the economy in New York.

Several tech stocks are in focus with the start of the Consumer Electronics Show in Las Vegas, the biggest gadget show of the year.

Microsoft (MSFT, Fortune 500) kicked off CES by announcing a string of movie and TV deals, including one to have Walt Disney Co. (DIS, Fortune 500) sell TV shows through the Xbox Live service, and a similar deal with MGM to sell movies that way. It also struck a deal with General Electric (GE, Fortune 500) unit NBC Universal to present online footage from this summer's Olympic games using Microsoft's new Silverlight software rather than the Flash software from Adobe which has been the industry standard.

Sony got a boost after Time Warner (TWX, Fortune 500), the largest publisher of DVDs, announced it would use only Sony's Blu-ray disc format for its high definition DVDs, rather than releasing HD titles in both Blu-ray and the competing HD DVD format from Toshiba, as it had been doing. Time Warner is owner of CNNMoney.com.

Napster (NAPS) also said it would start selling music downloads as unprotected MP3 files.

The Wall Street Journal reported Monday that fast food leader McDonald's (MCD, Fortune 500) is taking aim at Starbucks (SBUX, Fortune 500) with plans to install coffee bars with "baristas" serving cappuccinos, lattes, mochas and the Frappe, a rival to Starbucks' ice-blended Frappuccino, at 14,000 U.S. locations.