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U.S. Stocks Head for Higher Open

NEW YORK (AP) _ U.S. stocks appeared headed for a higher open Monday after a fresh round of buyout news offered evidence that Wall Street's penchant for dealmaking hasn't disappeared.

Stock futures turned higher after Transocean Inc., an offshore contract drilling services company, and GlobalSantaFe Corp. said the companies agreed to combine. The combined company will have a market value of about $53 billion.

In addition, equipment rental company United Rentals Inc. said it agreed to be taken private by affiliates of Cerberus Capital Management LP for about $4 billion in cash.

British bank Barclays PLC said it would raise its offer for ABN Amro Holding NV to $93.2 billion to fight a rival bid from a group led by Royal Bank of Scotland PLC.

In addition to buyout news, better-than-expected profit news from Merck & Co. and Schering-Plough Corp. helped boost optimism on Wall Street.

Dow futures expiring in September rose 42, or 0.30 percent, to 13,980, while Standard & Poor's 500 index futures rose 4.00, or 0.26 percent, to 1,549.10. Nasdaq 100 index futures rose 2.00, or 0.10 percent, to 2,057.25.

Light, sweet crude fell 42 cents to $75.37 per barrel in premarket electronic trading on the New York Mercantile Exchange.

The merger news appeared to help convince Wall Street that stocks have further room to push higher after hitting fresh highs last week and pulling back Friday.

Concerns have emerged in recent weeks that the merger activity that has helped fuel a run-up in stocks could slow as stocks become more expensive and if access to cheap capital becomes more difficult.

Friday's decline came as lackluster profit reports from Caterpillar Inc. and Google Inc. raised concerns about the overall strength of corporate earnings.

The Transocean/GlobalSantaFe combination also reflects strong demand as energy companies can afford to spend more on difficult-to-extract supplies. Oil prices touched nearly one-year highs last week. Under the terms of the deal, Transocean shareholders will $33.03 and 0.6996 shares of the combined company for each share of Transocean they own, and shareholders of GlobalSantaFe will receive $22.46 and 0.4757 shares of the company for each share of GlobalSantaFe they own.

The United Rentals deal, for $34.50 per share, represents a 7 percent premium over United's closing price of $32.37 Friday. It also is a 25 percent premium to the stock's closing price of $27.55 on April 10, the day the company said it was exploring strategic options.

Beyond buyout news, the parade of corporate earnings reports continues Monday, with American Express Co. expected to weigh in. Wall Street expects the credit card issuer will turn a profit.

Merck & Co., which, like American Express is one of the 30 stocks that comprise the Dow Jones industrial average, said its second-quarter earnings rose 12 percent, while Schering-Plough said its second-quarter profit more than doubled.

With no major economic data expected investors will be able to concentrate fully on earnings.

Earnings news on Friday unnerved investors and was in part responsible for a 150-point drop in the Dow. The drop capped a losing week for the Dow after three weeks of gains. On Thursday, the Dow managed to finish above 14,000 for the first time and the Standard & Poor's 500 index likewise logged a record close Thursday.

On Monday, the dollar was mixed against other major currencies, while gold prices fell.

Overseas, Japan's Nikkei stock average rose 0.01 percent. Britain's FTSE 100 rose 0.25 percent, Germany's DAX index fell 0.17 percent, and France's CAC-40 fell 0.17 percent.
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