Stocks set for higher start

NEW YORK (CNNMoney.com) -- U.S. stocks were headed for a higher open Monday as investors awaited the latest update on the housing sector and looked ahead to a busy week of economic events.

Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were modestly higher ahead of the opening bell. Futures measure current index values against perceived future performance.

Trading has been choppy on Wall Street recently as investors look for solid signs pointing to a sustained recovery. Stocks managed to rise last week, although gains over the last five trading days have been modest. But a raft of economic readings coming out this week may offer up some clarity.

Investors will be closely watching a combination of housing data and homebuilder earnings to see how the sector fared after the federal home buyer tax credit expired in April.

"Given that the economy is so reliant on consumer spending, any indication that some stability is being found in the housing market is one factor that could contribute to propelling stocks higher," said Mark Luschini, chief investment strategist for Janney Montgomery Scott.

Economy: At 10 a.m. ET, the National Association of Home Builders and Wells Fargo will release a report on housing affordability -- the first of a number of readings on the housing market due out this week.

August housing starts and building permits come out Tuesday, while new and existing home sales are slated for release later in the week.

Fed: Investors will also be watching the Federal Reserve's announcement on interest rate policy Tuesday. The central bank is widely expected to hold rates steady, but investors will parse the Fed's policy statement for clues on the economic outlook.

Companies: Against the backdrop of housing data due out this week, two major homebuilders are also releasing their latest earnings reports.

Lennar (LEN) reported $825 million in revenue -- a 14% rise over the year-earlier quarter. Profit was $30 million, or 16 cents per share, well above analysts' forecasts of 4 cents per share on $760.2 million in revenue. Shares of Lennar rose nearly 6% in pre-market trading.

Rival homebuilder KB Home (KBH) will report earnings on Friday.

IBM (IBM, Fortune 500) announced Monday that it plans to acquire data storage company Netezza (NZ) for $27 per share, or about $1.7 billion. After the announcement, Netezza shares rose 13% in premarket trading.

Verizon Communications (VZ, Fortune 500) named Lowell McAdam as its president and chief operating officer, putting him second in line to Chairman and CEO Ivan G. Seidenberg. Shares were up slightly

BP (BP) announced Sunday that its Macondo well in the Gulf of Mexico has been cemented shut and is "effectively dead." The well ruptured 5 months ago, causing the worst oil spill in U.S. history. Shares of BP rose about 1% in early trading.

World markets: European shares were higher in midday trading. Britain's FTSE 100 jumped 1.2%, the CAC 40 in France rose 0.9%, and Germany's DAX added 0.6%.

In Asia, the Hang Seng ended modestly higher, while the Shanghai Composite edged lower. Japanese markets were closed for a holiday.

Currencies and commodities: The dollar fell against the euro and the Japanese yen, but rose slightly against Britain's pound.

Oil futures for October delivery gained 7 cents to $73.73 a barrel. The October contract is slated to expire at the end of trade Tuesday, with volume already picking up in the November contract.

Gold for December delivery gained $4.70 to $1,282.20 an ounce, nearing its intra-day high of $1,284.40 reached on Friday.