Stocks poised for weak open

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NEW YORK (CNNMoney.com) -- U.S. stock futures made modest gains Monday as investors weighed speculation of about a number of major corporate deals.

About three hours before the start of trading, Nasdaq and S&P futures were narrowly higher, indicating a flat to slightly higher open for Wall Street.

U.S. stocks racked up heavy losses last week as investors were unable to shake off worries about the economy and credit crisis.

Stocks to watch include Yahoo (YHOO, Fortune 500), which reportedly is set to reject Microsoft's (MSFT, Fortune 500) unsolicited $31-a-share takeover bid worth nearly $45 billion. The Internet bellwether is expected to say the offer undervalues the firm, according to published reports.

The Times of London reported Monday that Yahoo is looking to hold merger talks with AOL which, like CNNMoney.com, is a unit of Time Warner (TWX, Fortune 500). Last week Time Warner announced that it was looking to split the shrinking dial-up Internet service provider business of AOL from its advertising-supported Web sites as a way of expanding its strategic options for both businesses.

The Times of London added that Yahoo is also considering trying to work out deals with Google (GOOG, Fortune 500), its major rival in Internet search, or media conglomerate Walt Disney.

Yahoo shares rose 2.6% in early Frankfurt trading, while Time Warner gained 0.5% and Microsoft shares were little changed.

The Wall Street Journal is reporting that embattled cell phone maker Motorola (MOT, Fortune 500) is in talks with telecom equipment maker Nortel Networks (NT) about a deal to combine their wireless-infrastructure units in a joint venture.

In trading in Asia, traders returned to work in Hong Kong after the Lunar New Year holiday and took stocks 3.6% lower at the close. Markets in Shanghai and Taiwan stayed close for the holiday and Japanese markets were closed for a separate holiday there. European stocks opened slightly lower, although they were off their earlier lows in midday trading.

Oil prices retreated in early trading, after spiking on Venezuelan President Hugo Chavez's threat to cut off oil sales to the United States in retaliation for legal moves by Exxon Mobil (XOM, Fortune 500) to seize some of his country's assets. A barrel of light sweet crude lost 31 cents to $91.46 in electronic trading.