* Oil rises above $40 a barrel on tensions in the Mideast
* Kuwait ends deal to form joint venture with Dow Chemical
* Trading expected to be light through holiday week
(Adds details)
By Leah Schnurr
NEW YORK, Dec 29 (Reuters) - U.S. stocks were set for a
flat to higher open on Monday with energy shares poised to
benefit from a jump in oil prices in the wake of escalating
political tensions in the Middle East.
Oil prices <CLc1> rose to more than $40 per barrel, while
the price of gold also surged as Israeli warplanes hit the
Hamas-ruled Gaza Strip for a third day and Israel prepared to
launch a possible invasion. For details, see [].
Shares of Exxon Mobil <XOM.N> rose 1.3 percent to $78.16
before the opening bell, while Chevron <CVX.N> was up 1.2
percent at $71.20.
However, Kuwait's decision to end a $17.4 billion
petrochemical joint venture with Dow Chemical <DOW.N>, possibly
upsetting Dow's plans to buy rival Rohm & Haas <ROH.N>, could
weigh on the market. [].
Shares of Dow were down 8.2 percent at $17.75 in premarket
trade, while Rohm & Hass tumbled 17.6 percent to $52.40.
"It's going to be a quiet week with a focus on (upcoming)
earnings and the geopolitical concerns we have in the Middle
East," said Andre Bakhos, president of Princeton Financial
Group in Princeton, New Jersey.
"Over the recent months, analysts have been ratcheting down
their earnings forecasts so now the game is to beat the revised
numbers."
S&P 500 futures <SPc1> rose 1.50 points and were above fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures <DJc1> climbed
25 points, and Nasdaq 100 <NDc1> futures added 3.50 points.
Trading was expected to be light throughout the week
shortened by the New Year's holiday. The market has been unable
to mount a significant year-end rally that many investors had
hoped for.
The broad S&P 500 is down about 40 percent for the year,
putting it behind 1931's 47.1 percent record drop. But
investors are hopeful the incoming White House administration
will bring another stimulus package to help steer the United
States out of a year-long recession.
President-elect Barack Obama has said signing a major
economic stimulus package will be his priority when he takes
over the presidency on Jan. 20.
Over the weekend, one of Obama's top economic advisors
said financial policy should address both immediate job
creation and longer-term investment needs.
Lawrence Summers, Obama's pick to head the White House
National Economic Council, said spending government money
solely to stimulate consumer spending would be a short-sighted
mistake. [].
A consortium of private equity and hedge fund firms,
including J.C. Flowers & Co is close to a deal to buy the
assets of failed mortgage lender IndyMac, according to a source
familiar with the matter. [].
(Editing by Tom Hals)
