Before the bell: Futures higher as oil retreats, dollar strengthens

Stock futures were higher early Monday morning as the dollar strengthened and oil prices retreated. Investors may be coming into the market looking for bargains as a result of the recent selloff, meanwhile digesting news of a profit warning from FedEx, upbeat outlook from HSBC and Cableivision may be close to buying Newsday.

On Friday, stocks tanked after oil kept setting new highs, passing the $126 per barrel level. Losses from American International Group -- a Dow component -- also contributed to the bearish sentiment as many had hoped financials were on their way to a recovery. The Dow industrials lost 120 points, or 0.94%, the Nasdaq Composite declined 5 points, or 0.23%, and the S&P 500 declined 9 points, or 0.67%.

Without much economic news, investors will focus on the dollar and oil prices. After breaking the $126 per barrel level Friday and settling at $125.96, oil prices retreated Monday in Asia as the dollar strengthened against the euro and yen. Of course, the retreat is relative and oil has been trading around $125.34 recently.
And for the first time since December 2005, futures traders are turning bullish on the dollar, according to Bloomberg. According to two measures of currency trading, it seems traders expect further dollar appreciation, and not only that, that the rally will hold.