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If last week's start market activity was largely defined by investor concerns about the weakest U.S. financial firms being nationalized by the U.S. administration, trading on Monday appeared pivot on relief that maybe, just maybe, nationalizing isn't in the cards.

U.S. stock index futures were higher with about an hour before markets open, suggesting that stocks will rise at the start of trading. Futures for the Dow Jones industrial average rose 58 points, to 7410. Futures for the broader S&P 500 rose 8 points, to 777.

In Europe, the U.K.'s FTSE 100 was up 0.6 per cent and Germany's DAX was up 1.3 per cent in afternoon trading. In Asia, Japan's Nikkei 225 fell 0.5 per cent in overnight trading.

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The change of heart over the threat of nationalization came as U.S. officials said they stand "firmly" behind the banks and prefer the use of convertible preferred shares to boost balance sheets. Meanwhile, Ken Lewis, chief executive of Bank of America Corp. said that he does not require additional financials assistance from the administration saying the bank can "make it through this downturn on our own."

The credibility of bank executives has been shredded during the financial crisis of the past year - but investors appear to be embracing this latest round of optimism. Bank of America shares rose 11 per cent in premarket activity and Citigroup Inc. shares rose 12 per cent.

In Canada, retail sales plunged 5.4 per cent in December, twice the decline that economists had been expecting and representing the worse setback in consumer spending since 1991.

Finally, Nova Chemicals Corp. is expected to soar at the start of trading after the Calgary company secured $150-million in new financing and agreed to a takeover by International Petroleum Investment Co. for $2.3-billion, or $6 a share - a massive premium given that the shares closed on Friday at just $1.66.

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