Bulls get a lift from deals

Stock futures higher on news of Alcatel-Lucent combination and reports that deals for GMAC, Bank of New York's retail business could be near.

April 3, 2006: 6:46 AM EDT


NEW YORK (CNNMoney.com) - A number of major corporate deals were poised to give stocks a strong start Monday.

Stock futures were up in early trading, pointing to a solidly higher open for stocks, after news over the weekend that Paris-based telecom equipment maker Alcatel (Research) agreed to buy U.S. rival Lucent Technologies (Research) for $13.4 billion.

Also expected Monday morning is a deal by embattled automaker General Motors (Research) to sell a majority stake in its profitable finance unit GMAC for an estimated $11 billion to a group led by hedge fund and private equity firm Cerberus Capital Management along with Citigroup. GM is attempting to restore GMAC to an investment grade credit rating with the move, although last week a credit analyst at rating agency Standard & Poor's said that a sale to a consortium wasn't as certain to achieve the desired upgrade as would a sale to a single strong financial buyer.

Also over the weekend, Ameristar Casinos (Research) announced that it has made a $42 a share offer for Aztar (Research), making it the third bidder for company, following earlier offers from Colony Capital and Pinnacle Entertainment.

In addition, the Wall Street Journal reports that vintner Constellation Brands is near a deal to buy Canadian winemaker Vincor International for more than $1 billion dollars

The Journal also reported a nearly $1 billion deal is close for the nation's No. 1 funeral home operator Service Corp. International to acquire No. 2 operator Alderwoods Group in a cash deal that would pay an 11 percent premium above the 3.5 percent gain Alderwoods saw in Friday trading.

Oil prices were higher on new concerns about Iran.

The May light crude futures contract for NYMEX gained 39 cents to $67.02 a barrel in electronic trading, while the May contract for Brent crude rose $1.14 to $67.05.

Major markets in Asia closed sharply higher Monday after the Bank of Japan's key tankan survey showed that, while the region's largest economy is recovering, a rate rise could still be some time away. Major European markets were also up in early trading.

Treasury prices were lower, lifting the yield on the benchmark 10-year note to 4.87 percent from 4.85 percent late Friday. The dollar was higher against the euro and the yen.

Economic reports Monday include a closely watched survey of manufacturing executives by the Institute of Supply Management and a government report on construction spending, both due at 10 a.m. ET. The ISM report for March is forecast to rise to 57.7 from 56.7 in February, according to economists surveyed by Briefing.com. Construction spending is forecast to be up 0.5 percent in February after a 0.2 percent gain in January.

In corporate news away from the merger front, No. 1 retailer Wal-Mart Stores (Research) reported Saturday that it now sees a 1.3 percent gain in March sales at its U.S. stores open at least a year. That's at the low end of its earlier guidance of a 1 to 3 percent rise.