Stocks Set for Early Bounce

Traders lay down bullish bets despite Wal-Mart's muted comps.
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Stocks are poised for solid gains Tuesday as traders shake off a disappointing year-end and get down bullish bets on January.

Index futures recently showed the

S&P 500

trading 7 points above fair value, while the Nasdaq 100 was set for a 9-point jump. The 10-year Treasury bond was down 2/32 in price to yield 4.40%, matching the yield on the two-year note, while the dollar fell against the yen and euro.

Energy prices were mixed as storms battered large areas of the U.S. and traders returned from the holiday break. In electronic Nymex trading, crude for February delivery was recently up 24 cents to $61.28 a barrel, while natural gas fell 42 cents to $10.80 per million British thermal units.

Overseas markets were higher, with London's FTSE 100 recently adding 1% to 5674 and Germany's Xetra DAX up 0.8% to 5490. In Asia, Hong Kong's Hang Seng added 0.5% overnight to 14,945, while Japanese markets were closed for a holiday.

Stocks fell in the last session of 2005, with the

Dow Jones Industrial Average

and

Nasdaq Composite

both losing about 0.6% while the S&P 500 lost 0.5%. For the year, the Dow finished 66 points below where it started, while the Nasdaq gained 30 points and the S&P 500 added 36 points.

Trading Tuesday reflected optimism about the new year despite a significant piece of bearish corporate news. On Sunday,

Wal-Mart

(WMT) - Get Report

, the world's biggest discounter, said same-store sales in the U.S. rose only 2.2% in December. The company had previously forecast December comps of plus 2% to 4%.

Elsewhere,

Cisco's

(CSCO) - Get Report

acquisition of

Scientific-Atlanta

(SFA)

is a step closer to completion after the expiration of the Justice Department's antitrust waiting period. The companies announced the $5.3 billion transaction in November.

Shares of newly independent

CBS

could see action Tuesday after Prudential started them at overweight with a $30 price target. The stock was spun out of

Viacom

(VIAB) - Get Report

and was trading at $25.40 on a when-issued basis on Friday..