NEW YORK (Reuters) - Stocks were set to rise on Monday, putting the S&P 500 on pace for its third straight advance after a robust June payrolls report and before the start of quarterly earnings reports after the market's close.
The benchmark S&P index <.SPX> rose 1 percent on Friday after government data showed the economy created more jobs than expected, another sign of steady growth. But many traders were away, extending the Independence Day holiday on Thursday. Volume was light and trading volatile.
"Today we will get a better read, but we do have (Friday's gains) to work with, so we are already in the green on that data," said Peter Kenny, chief market strategist at Knight Capital in Jersey City, New Jersey.
"Any shift lower from here would not necessarily be a vote of no confidence or a vote of caution for the market."
Dow component Alcoa Inc
Goldman Sachs analyst Davis Kostin said in a note to clients that rising earnings, coupled with stable margins, should lift the S&P 500 by 8 percent to Goldman's year-end target of 1,750. The index ended at 1,632 on Friday.
S&P 500 futures rose 7 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 gained 56 points, and Nasdaq 100 futures added 15.5 points.
Analysts' expectations call for S&P 500 earnings growth to rise 2.9 percent in the second quarter from a year ago, while quarterly revenue is forecast to increase 1.6 percent from a year ago, according to Thomson Reuters data.
"This earnings season the big question, more than it has been in four years, is going to be top line and revenue growth - not financial engineering, not cost savings, not cost cutting. Where is the organic growth that leads to not just stabilization but a sense there is a demand component to this?" said Kenny.
Later in the week, earnings are expected from JPMorgan Chase & Co
(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama and Kenneth Barry)
(c) Copyright Thomson Reuters 2013. Check for restrictions at: http://about.reuters.com/fulllegal.asp