Dollar Weighs on Stock Market

Oil is also a factor as futures point to a lower open.
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Stocks drifted lower early Monday as sky-high oil prices and a falling dollar dominated investor sentiment ahead of another big week for corporate earnings.

Index futures recently showed both the

S&P 500

and Nasdaq 100 trading 2 points below fair value. The 10-year Treasury bond was up 7/32 in price to yield 5.01%, while the dollar fell sharply against the yen and was also lower against the euro.

Most Asian stock markets showed losses Monday after finance ministers of the Group of Seven industrialized nations called for currency liberalization in China after a weekend meeting in Washington. The Nikkei lost 490 points, or 2.8%, to 16,914 Monday, while Hong Kong's Hang Seng lost 130 points, or 0.8%, to 16,783.

"Greater exchange rate flexibility is desirable in emerging economies with large current account surpluses, especially China, for necessary adjustments to occur," the G7 advised. "In emerging Asia, particularly China, greater flexibility in exchange rates is critical to allow necessary appreciations, as is strengthening domestic demand, lessening reliance on export-led growth strategies, and actions to strengthen financial sectors."

Oil eased slightly but remained a drag on U.S. equities after closing at an all-time high Friday on concerns about the nuclear standoff in Iran. In electronic Nymex trading, June crude was recently off 63 cents to $74.54 a share.

Stocks are coming off a volatile weak marked by divergent earnings news and generally dovish emanations from the

Federal Reserve

. Since last Monday, the

Dow

is up 1.9% to a six-year high of 11,347, while the S&P 500 has added 1.7% to 1311 and the

Nasdaq

is up 0.7% 2343.

Monday's economic cupboard is bare, but it's a relatively busy day for earnings, with quarterly reports expected from

Caterpillar

(CAT) - Get Report

,

American Express

(AXP) - Get Report

and

Sun Micro

(SUNW) - Get Report

.

Earlier,

Hasbro

(HAS) - Get Report

reported a first-quarter loss of $4.9 million, or 3 cents a share, compared with an adjusted loss of $7.2 million, or 4 cents a share, last year. Revenue rose 3% to $468.2 million.

To view David Peltier's video take on today's premarket action, click here

.

Novartis

(NVS) - Get Report

reported first-quarter earnings of $2 billion on a 13% rise in sales to $8.3 billion. The company guided for full-year sales growth in the high single digits following the completion of its acquisition of

Chiron

(CHIR) - Get Report

.

Heinz

(HNZ)

affirmed its earnings guidance for this year and next and said a restructuring blueprint should underpin a turnaround. Heinz sees earnings of $2.10 to $2.16 a share this year; analysts were forecasting $2.11 a share.

Cendant

(CD)

might revise plans to spin off its travel unit after seeing unsolicited offers to acquire the business for as much as $4.5 billion. The company hired investment bankers to explore options for the unit, which includes Orbitz, among other units.

Heinz

(HNZ)

affirmed its earnings guidance for this year and next and said a restructuring blueprint should underpin a turnaround. Heinz sees earnings of $2.10 to $2.16 a share this year; analysts were forecasting $2.11 a share.

Cendant

(CD)

might revise plans to spin off its travel unit after seeing unsolicited offers to acquire the business for as much as $4.5 billion. The company hired investment bankers to explore options for the unit, which includes Orbitz, among other units.