Higher open set on bank earnings

Small-cap stocks are expected to open higher, underpinned by another positive earnings surprise on the banking front. Gains could be limited, however, by rising energy values. The Russell 2000 (NYSE:IWM) was up about 0.5% in after-hours trading, which would suggest an open near 696.

Crude oil futures were in rally mode ahead of the stock market opening, climbing nearly $2.50 dollars a barrel back above $131. Despite the negative impact on stock market psychology here in the United States, oil and other commodity-based shares were a supportive factor in European stock trading, with copper and gold also higher overnight.

On the earnings front, several big name companies will be under the results radar today, but the early key appears to be Bank of America (NYSE:BAC), which was up some 10% in overnight trading as investors embraced quarterly figures. In other large-cap news, Genentech Inc. (NYSE:DNA) rallied more than 10% overnight on news that Swiss firm Roche Holdings made an offer to buy all outstanding shares for more than $43 billion.

Over the weekend, Treasury Secretary Henry Paulson said that 99% of U.S. banks were on solid footing, but that the economy could be in a slow growth period for some time. He was also confident that Congress would approve a bailout plan for GSEs, and both Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) were higher . . .

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