Bulls Trample Fearful Futures

Monday's surprise bull run has some people questioning the value of those early morning stock futures quotes.

The Dow Jones Industrial Average was up 18 points at 12,131 around midday Monday. The blue-chip index reversed an early loss of 75 points and recouped a bit of last week's sharp declines.

The market's resilience points to the huge amount of cash on hand at mutual funds and institutional investors. It shows that even after last week's turmoil, there are lots of investors looking for stock market bargains.

And with many huge companies employing stock buybacks and paying out hefty dividends -- last week alone, Dow components AIG (AIG Quote) and Verizon (VZ Quote) announced plans for multibillion-dollar stock repurchases -- observers say there are plenty of factors pushing prices higher.

But the swing also questions the value of the early morning futures quotes that are widely used to predict daily market action. Monday's rally marked the second time in a week that stocks shrugged off negative action in the futures market to post gains.

"Big moves premarket give very little indication of where we'll be at the end of the day," says Barry Hyman, equity market strategist with EKN Financial. "That's something we cannot discount."

In the hours leading up to Monday's opening in New York, stock futures were predicting a selloff that would take the Dow below the 12,000 mark for the first time in five months.