Stocks Set to Rally as Oil Sinks - TheStreet

Updated from 7:59 a.m. EDT

Premarket futures suggested stocks were ready for an opening rally Tuesday, after a weaker-than-feared Hurricane Gustav failed to cause major oil-supply disruptions, sending the price of crude substantially lower.

Futures for the

S&P 500

were up 11 points at 1293 and were 11 points ahead of fair value.

Nasdaq

futures were up 20 points to 1895 and were 21 points above fair value.

Ahead of the first trading day of the Labor Day-shortened week, the price of crude oil was plummeting $8.22 to $107.24, after Gustav hit the Louisiana coast but largely spared New Orleans and energy-production facilities in the area. Gold was down $27.70 to $807.50.

As for corporate news, Internet company

Google

(GOOG) - Get Report

said it will develop its own Web browser in an effort to compete with

Microsoft

(MSFT) - Get Report

.

Elsewhere in technology,

Alcatel-Lucent

(ALU)

appointed Ben Verwayyan, former head of

BT Group

, as its new CEO. Alcatel-Lucent also selected Philippe Camus to be its nonexecutive chairman.

Meanwhile,

Bloomberg

reported that Korea Development Bank is holding discussions to buy a stake in struggling brokerage

Lehman Brothers

(LEH)

, continuing a rumor that has been around for the past couple of weeks but has yet to be confirmed.

Away from stocks, longer-dated U.S. Treasury securities were trading lower. The 10-year note was down 14/32 to yield 3.87%, and the 30-year was losing 20/32, yielding 4.46%. The dollar was rising sharply against the euro, yen and pound.

Turning to the day's economic data, traders will receive the U.S. Census Bureau's look at July construction spending, as well as the Institute for Supply Management's manufacturing index.

Overseas, European indices were looking strong, as the FTSE in London and the Dax in Frankfurt posted gains. In Asia, Japan's Nikkei was dropping, while Hong Kong's Hang Seng was slightly higher.