Stocks set to extend rally

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NEW YORK (CNNMoney) -- U.S. stocks were headed for a slightly higher open Monday as investors continued to cheer an upbeat jobs report and welcomed lower borrowing costs in Spain and Italy.

U.S. stock futures were up between 0.1% and 0.5% early Monday, poised to extend Friday's rally that was sparked by a stronger-than-expected July jobs report.

With no other reports due on the economy Monday, investors will keep an eye on further news about Europe's debt crisis. Yields on Spanish and Italian bonds continued to decline Monday.

Investors also remained focused on financial results out of Corporate America.

Chesapeake Energy (CHK, Fortune 500), which has been in the spotlight amid takeover chatter and a management shakeup, is on tap to report earnings after the closing bell.

Other earnings due later in the week include Disney (DIS, Fortune 500), News Corp (NWSA, Fortune 500) and J.C. Penney (JCP, Fortune 500).

Meanwhile, Wall Street will keep close tabs on Knight Capital Group. The firm said early Monday that investors have agreed to buy $400 million in convertible preferred stock of the company.

The announcement comes as Knight (KCG) faces a $440 million loss from a software glitch that triggered a series of bizarre moves in otherwise thinly traded stocks last Wednesday, affecting how shares for some 150 NYSE-listed stocks were routed.

Knight did not name the investors but, according to news reports citing people with familiar with the matter, the group includes TD Ameritrade (AMTD), Blackstone Group (BX), Getco, Stifel Nicolaus (SF), Jefferies Group (JEF) and Stephens Inc.

Knight said the deal is expected to close later Monday, but investors still seem nervous. Shares of Knight plunged nearly 30% in pre-market trading, and were halted.

U.S. stocks rallied Friday as a stronger-than-expected July jobs report helped lift markets for the week.

World markets: European stocks were higher in afternoon trading. Britain's FTSE 100 ticked up 0.3%, the DAX in Germany and France's CAC 40 added 0.7%.

Asian markets rallied, as investors cheered the better-than-expected U.S. jobs report from last Friday. The Shanghai Composite rose 1%, the Hang Seng in Hong Kong climbed 1.7%, and Japan's Nikkei surged 2%.

Companies: Best Buy's (BBY, Fortune 500) stock surged after the company's founder and major shareholder Richard Schulze offered to take the electronics retailer private at $24 to $26 a share, a 36% to 47% premium.

Shares of Tyson Foods (TSN, Fortune 500) fell in early trading after the seller of chicken, beef and other prepared foods posted earnings and revenue that fell short of Wall Street's expectations.

The company also highlighted the rising price of grain amid the ongoing drought. While Tyson said it ultimately expects to pass along the higher costs, it also cautioned that they will likely pressure earnings in 2013.

Late Friday, Warren Buffett's Berkshire Hathaway (BRKB) reported a drop in earnings due to derivatives losses, but posted strong gains in its insurance business.

Currencies and commodities: The dollar rose against the euro and British pound, but slipped versus the Japanese yen.

Oil for September delivery fell to 20 cents to $91.20 a barrel.

Gold futures for August delivery rose $2.60 to $1,608.60 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 1.55% from 1.58% late Friday.

Sunday marked the one-year anniversary of Standard and Poor's downgrade of the U.S. credit rating from AAA.

Despite S&P's blow, yields on U.S. government debt across all maturities have hit record lows in the post-AAA world as investors' enthusiasm for Treasuries intensified amid a tepid U.S. economic recovery, a growing European debt crisis, and slowing growth in emerging markets -- particularly China.

In recent weeks, the yield on the 10-year Treasury note has fallen to a record low around 1.4% from 2.6% a year ago. The 30-year yield has dropped to less than 2.5% from almost 4% last August. As investors buy Treasuries and drive up the price, yields continue to decline.