Before the bell: Trying to extend Friday's rally

U.S. stock futures are indicating that stocks may open higher. No doubt, bulls will try to extend Friday's markets rally and stage another one today as they are getting a further boost from global markets. However, while markets may indeed have momentum on their side, I would expect today to be more subdued.

On Friday, the Federal Reserve cut the discount rate by 50 basis points from 6.25% to 5.75% sending stocks soaring. Markets consequently jumped with the Dow industrials ending the day with a 233 points climb, or 1.8%, and both the Nasdaq Composite and the S&P 500 adding 2.2% and 2.5% respectively.

Asian markets, which were closed by the time the Fed made its move -- and indicated its willingness for more -- shot higher overnight. The Nikkei 225, after plunging over 5% on Friday, recovered today and ended 3% higher. Hong Kong's Hang Seng Index jumped 5.9% and China's Shanghai Composite ended up 5.3%. European stocks that had the time to enjoy the graces of the Fed rate cut Friday are also trading higher as analysts recommended buying shares of financial companies.

Many investors now think the worst is behind us. The question is whether the root cause of the crisis has been dealt with adequately and whether the credit crunch stemming from subprime mortgage woes is over. Was Friday's rally for real, or was it fueled by, as many speculate, investors caught off guard by the rate cut covering their short positions.

Economic data is light today with the Conference Board reporting July leading indicators at 10:00 a.m. The index is expected to rise 0.3%, compared with a decline of 0.3% in June.

Investors will also watch hurricane Dean, which will have an impact on oil prices.

In corporate news, Lowe's Companies (NYSE: LOW) reported earnings this morning, beating EPS but not revenue estimates. Same-store sales fell 2.6%.

HSBC Holdings PLC (NYSE: HBC) is in talks to buy a majority stake in Korea Exchange Bank from Lone Star Funds.

Countrywide Financial Corp (NYSE: CFC) began laying off staff involved in originating loans.