Stocks set for higher start
Futures gain as investors mull deal in bank sector and brace for reading on builder confidence. Oil prices in focus.
NEW YORK (CNNMoney.com) -- Stocks were poised for early gains Monday, despite higher oil prices and expectations of another dismal report reflecting the ongoing slump in the housing market.
Less than three hours before the market open, Nasdaq and S&P futures were higher, with a comparison to fair value suggesting a positive open for Wall Street.
Lower oil prices and a stronger dollar helped blue chips and the broader market finish Friday's session higher. Tech shares, however, ended the session on a weak note.
UnionBanCal deal: Helping to brighten the mood Monday was a deal in the banking sector. UnionBanCal (UB) accepted a sweetened bid from Mitsubishi UFJ Financial Group (MTU).
The Japanese bank will pay $3.5 billion for the remaining 35% portion of the California bank that it doesn't already own. UnionBanCal had rejected the two previous offers as too low.
Oil: Crude futures turned lowery Monday as Tropical Storm Fay approached Florida. Forecasters said the storm could strengthen to a hurricane before hitting the Gulf Coast, but appeared likely to miss oil producing areas.
U.S. crude for September delivery eased 17 cents to $113.60 a barrel in electronic trading.
Housing: The National Association of Homebuilders was due to release its monthly home building index.
The report is expected to show that builder confidence remained at a record low in August.
Qwest: The telecommunications carrier reached a tentative deal with two unions early Monday, averting a possible strike.
Qwest (Q, Fortune 500) is providing phone and Internet services for both the Democratic and Republican National Conventions.
Lowe's: Lowe's (LOW, Fortune 500), the nation's No. 2 home improvement retailer, saw second quarter earnings fall, but it managed to beat forecasts. Shares edged up 3% in pre-market trading, even as it offered a downbeat sales and profit outlook for the current quarter.
Fannie and Freddie: Mortgage finance firms Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) both saw shares tumble 7% in pre-market trading as a report in financial weekly Barron's raised questions about their balance sheets. The report suggested that an unamed Bush administration official predicted they would be unable to raise capital in private markets and thus would need to be taken over by the federal government.
Other markets: Stocks in Asia ended mixed and European markets fell in early trading.
The dollar fell back against the euro and the yen. 
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