Ringing up a rally?

Stock futures point higher as investors digest news of AT&T's $67 billion merger with BellSouth.

March 6, 2006: 6:33 AM EST


NEW YORK (CNNMoney.com) - Telecom stocks will take the spotlight Monday, a day after AT&T announced a $67 billion deal to acquire smaller rival BellSouth.

S&P and Nasdaq futures rose in before-hours trading, pointing to a higher start for Wall Street.

AT&T (Research) said Sunday it would buy BellSouth (Research) for $67 billion in stock to expand its reach into the Southeast and acquire the remainder of Cingular Wireless. AT&T currently owns 60 percent of Cingular, while BellSouth owns the rest.

Together, AT&T and BellSouth would have a national long-distance telephone and data network, with residential customers stretching from Florida to California.

Telecom stocks rallied in European markets in early Monday, despite some concerns about whether regulators would eventually approve the deal.

The deal would recombine the former "Ma Bell" with four of the seven original Baby Bells regional telephone companies. AT&T was broken up in 1984, with the parent controlling the long-distance assets and its seven offspring controlling regional local telephone services.

Elsewhere, oil prices eased but stayed above $63 a barrel ahead of this week's OPEC meeting on Wednesday.

Overseas, major markets in Asia were mostly higher while easing oil prices and strength in telecom stocks pushed European markets higher. (For more on world markets, click here.

Treasury prices edged lower, pushing the yield on the benchmark 10-year note up to 4.69 percent from 4.68 percent late Friday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar was higher against the yen and the euro.

In other corporate news, investors will likely pay attention to shares of BlackBerry maker Research in Motion (Research) after the company agreed to pay $612.5 million to NTP to settle a long-standing patent dispute that had threatened to shut down the popular wireless e-mail service for its 3 million users.

RIM shares soared 19 percent in after-hours trading Friday.