Stocks Face Early Pop

Solid retail returns and lower oil keep buyers in charge.
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Stocks were set to rise from four-and-a-half year highs Monday as oil plunged and the early returns on post-Thanksgiving retail were encouraging.

Index futures recently showed the

S&P 500

trading 3 points above fair value, while the Nasdaq 100 was set for a 4-point gain. The 10-year Treasury bond was down 8/32 in price to yield 4.46%, while the dollar was higher against the yen and euro.

Energy prices slid as another mass of mild weather moved into the northeastern U.S., where a plurality of the world's heating oil is consumed. Crude for January delivery was recently falling $1 to $57.71 a barrel, while unleaded gasoline lost 2 cents to $1.44 a gallon.

Overseas markets were higher, with London's FTSE 100 recently adding 0.3% to 5541 and Germany's Xetra DAX gaining 0.9% to 5239. In Asia, Japan's Nikkei rose 1.4% overnight to 14,989, while Hong Kong's Hang Seng gained 0.1% to 15,100.

Despite a weak Friday, Americans appear to have opened their wallets in droves in the traditional first weekend of the holiday shopping season, with most of the buying focused on discount and electronics stores. The National Retail Federation says weekend sales were up 22% from a year ago at $27.8 billion while traffic jumped almost 8%.

The performance came despite shaky spending on Friday. According to private research group ShopperTrak, total sales were $8 billion on the day after Thanksgiving, down 0.9% from a year ago. Meanwhile, Visa said sales on its credit cards rose 15% from a year ago on Friday and Saturday combined.

Wal-Mart

(WMT) - Get Report

said November same-store sales rose 4.3% a year ago, at the high end of its 3% to 5% range. The stock closed at $50.49 on Friday.

Among stocks moving on the big weekend returns were

Sears

(SHLD)

, up 6% ahead of the bell, and iPod maker

Apple

(AAPL) - Get Report

, up 1.6%.

Merck

(MRK) - Get Report

was up 1% after outlining a plan to cut 7,000 workers and sell five of its 31 manufacturing facilities in an effort to save up to $4 billion over the next five years. The pharmaceutical giant put 2005 operating earnings at $2.47 to $2.51 a share, compared with the Thomson First Call estimate of $2.50 a share.