Stocks hovered Monday as investors waited to see if strong sales guidance from

Wal-Mart

(WMT) - Get Report

and assorted merger developments will be enough to extend a two-session rally.

Index futures recently showed the

S&P 500

trading half a point below fair value, while the Nasdaq 100 was set for a 1-point gain. The 10-year Treasury 5/32 in price to yield 4.53%, while the dollar rose against the yen and euro.

Stocks rose on Thursday and Friday as corporate earnings impressed and a weak report on fourth-quarter economic growth encouraged interest-rate doves. Trading this week will occur in the shadow of the

Federal Reserve's

meeting on Tuesday -- Alan Greenspan's last.

The Fed is widely expected to raise interest rates by a quarter-point for the 14th straight time, to 4.5%. All eyes will be on the accompanying policy statement for clues about how many more -- if any -- rate hikes are likely in meetings to come. Fed funds futures put odds for a quarter-point March hike at about 50-50.

For all of last week, the

Dow Jones Industrial Average

rose 2.3%, the S&P 500 rose 1.7% and the

Nasdaq Composite

rose 2.5%.

Oil, which gained $1.50 a barrel on Friday as concerns again rose about Iran's nuclear ambitions, was trading down 30 cents to $67.47 a barrel early Monday. Warm weather in the Northeast remained a key restraint on the contract.

Overseas markets were mixed, with London's FTSE 100 recently unchanged at 5785 and Germany's Xetra DAX rose 0.1% to 5651. In Asia, Japan's Nikkei rose 0.6% overnight to 16,551, while Hong Kong's markets were closed for a holiday.

In corporate news, Wal-Mart said it expects to post same-store sales growth of 4.7% in January, toward the high end of its 3% to 5% range, reflecting strong sales of food and groceries. Wal-Mart had comps growth of 2.2% in December.

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

.

Schering-Plough

( SGP) swung to a fourth-quarter profit on a 6% rise in sales. At $104 million, or 7 cents a share, the profit was a penny short of estimates.

Other companies expected to report earnings Monday are

ExxonMobil

(XOM) - Get Report

,

Kraft

( KFT),

Kodak

( EK) and

Zimmer

(ZMH)

.

In mergers news, European steelmaker Arcelor rejected the $23 billion hostile takeover offer made last week by Dutch

Mittal Steel

(MT) - Get Report

. Mittal is reportedly trying to round up political support for its bid, which would create the world's biggest steel company.

Serono

( SRA), meanwhile, has reportedly resumed discussions toward selling itself to

GlaxoSmithKline

(GSK) - Get Report

. Serono's original asking price of $15 billion is said to have been reduced.