* Falling oil, mortgage rates underpin sentiment
* July pending home sales awaited
* U.S. crude drops below $105 a barrel on strong dollar
* Hewlett-Packard, McDonald's rise before the bell
(Recasts first paragraph, updates prices)
By Ellis Mnyandu
NEW YORK, Sept 9 (Reuters) - U.S. stocks headed for a
higher open on Tuesday as a drop in oil prices and mortgage
rates buoyed sentiment as did positive broker actions on
bellwethers including Hewlett-Packard <HPQ.N>.
Shares of HP, a Dow component, rose 1.4 percent before the
bell after a brokerage raised its rating and price target on
the computer maker.
McDonald's <MCD.N>, another Dow component, was also poised
to be among standouts, up 1.6 percent after posting August
same-store sales that beat some analysts' expectations. For
more see [].
A rise on Wall Street would add to Monday's gains that were
spurred by the bailing out of embattled home finance companies
Fannie Mae <FNM.N> and Freddie Mac <FRE.N>. The government
bailout triggered a drop in U.S. mortgage rates, which analysts
said would help boost demand for homes.
Even so, there was likely to be caution after uncertainty
over the global economy drove an overnight sell-off in Asia.
Additionally, there might temptation to lock in profits after
Monday's gains and lower oil prices were set to drag on shares
of energy companies, including Exxon Mobil Corp <XOM.N>.
Investors also await a report on U.S. July pending home
sales, due at 10 a.m. (1400 GMT).
U.S. front-month crude oil <CLc1> fell $2.20 to $104.16 a
barrel as the dollar rallied to a one-year peak against a
basket of other currencies <.DXY>.
Declining oil prices are a boon for both consumers and
businesses as they help lower energy costs, helping ease
strains on spending, a key driver of corporate profits.
"If you combine lower oil prices with the fact that
mortgage rates are coming down, gas prices are lowering, that's
better for the consumer," said Matt McCall, president of Penn
Financial Group based in Denver, Colorado.
S&P 500 futures <SPc1> jumped 4.10 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 <DJc1> rose 31
points and Nasdaq 100 <NDc1> climbed 6.75 points.
HP was raised to "outperform" from "market perform" at
Sanford C. Bernstein & Co, which also raised its price target
on the stock to $55 from $51. HP shares rose to $46.40 before
the bell, while shares of McDonald's, the world's largest
restaurant chain, rose to $63.39.
Exxon Mobil shares were off nearly 1 percent at $76.11 in
pre-market trade. Lehman Brothers <LEH.N> is also among stocks
to watch after Fortune magazine's website said the investment
bank is set to hold a conference call on Sept. 18 to discuss
third-quarter earnings and "key strategic initiatives."
Lehman shares were down 4.2 percent at $13.55 before the
bell.
U.S. stocks rose on Monday as investors bet Washington's
bailout of Fannie Mae and Freddie Mac would stabilize the U.S.
housing sector and calm jittery world financial markets.
(Editing by James Dalgleish)
