"There's some disappointment that there's still no ceasefire agreement in the Middle East," said Andre Bakhos, president of Princeton Financial Group, in Princeton, New Jersey.

"The market has been very optimistic, both from a geopolitical front and from an economic front."

On Monday U.S. Secretary of State Condoleezza Rice, who canceled plans to go to Beirut after an Israeli air strike killed at least 54 Lebanese civilians, said a ceasefire could be forged this week.

S&P 500 futures were down 2.80 points, below fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures fell 21 points, and Nasdaq 100 futures dropped 3.25 points.

Besides focusing on politics, investors will keep an eye on earnings, which could determine the market's direction.

Monday's earnings include quarterly financial reports from MetLife Inc., the largest U.S. life insurer and Tyson Foods Inc., the largest U.S. meat processor.

Shares of Apple Computer Inc., the maker of the popular iPod digital music player, will also be in the spotlight. Banc of America raised its rating on Apple to "buy," according to a report by MarketWatch.

Defense contractor Northrop Grumman Corp. may be in the spotlight after the Wall Street Journal reported that it has put its navigation systems unit on the auction block and that it could fetch as much as $1 billion.

In other ratings news, Piper Jaffray raised its rating on 24/7 Real Media Inc. to "outperform" from "market perform."

Prudential raised its rating on copper miner Phelps Dodge Corp. to "overweight" from "underweight," according to MarketWatch.

On Friday, stocks rallied as economic data bolstered hopes that the Federal Reserve may soon be done raising interest rates, and the S&P 500 recorded its best weekly gain since November 2004. A sharp drop in oil prices also helped sentiment.

The Dow Jones industrial average climbed 119.27 points, or 1.07 percent, to end at 11,219.70. The Standard & Poor's 500 Index gained 15.35 points, or 1.22 percent, to finish at 1,278.55. The Nasdaq Composite Index advanced 39.67 points, or 1.93 percent, to close at 2,094.14.

The House in the early hours voted 230-180 to raise the $5.15-per-hour minimum wage in three 70-cent steps until it reaches $7.25 in mid-2009.

During a bitter floor debate, Rep. Phil English, a Pennsylvania Republican, said most Democrats' opposition to the bill showed "they've always liked the politics of the minimum wage and cared little for the policy of the minimum wage."

But Democrats shot back that Republicans had staged an election-year stunt to get a minimum wage vote knowing the Senate won't go along because of opposition there to the estate tax cut. And some senators are opposed to any minimum wage hike.

Before this election year, Rep. George Miller, a California Democrat said, "You never raised a finger to help these individuals" getting paid the minimum wage.

Coming shortly before the House was to start a five-week summer break that will give members time to campaign for re-election, the legislation also would cut estate taxes, derided by Republicans as a "death tax," and extend several other popular tax cuts. Its estimated cost was about $310 billion over 10 years.

The package is likely to be debated next week in the Senate, where its fate was unclear. Efforts to roll back estate taxes failed in the Senate in June. Such a cut is a high priority for Republican leaders ahead of the November congressional elections when Democrats hope to make big gains.

REPEATED REJECTION

Senate Democratic leader Harry Reid of Nevada noted the Senate has "rejected fiscally irresponsible estate tax giveaways before and will reject them again."

The estate tax cut is estimated to help less than 1 percent of American families at a time of skyrocketing federal debt.

"Workers at the lowest end of the scale are being held hostage to 7,500 families," said Rep. Steny Hoyer of Maryland, the second-ranking Democrat in the House, who wanted a minimum wage increase bill without the estate tax cut.

Those 7,500 families are the number of wealthy families that would benefit from the estate tax cut. By contrast, some seven million workers would benefit from the increase in the minimum wage.

Republicans argue cutting estate taxes helps small businesses and farmers.

The bill also would renew for two years expired tax breaks for education, research, college tuition and other popular items.

For several years, Republicans controlling Congress have blocked an increase in the minimum wage, claiming it would backfire by causing employers to hire fewer entry-level workers.

But Democrats stepped up pressure this year for the increase, arguing high gasoline and heating prices were making it harder for the working poor to survive while working at wages frozen since 1997.

They were joined by dozens of moderate Republicans in the House who, facing tough re-elections in November, challenged their leaders and demanded a minimum wage vote before breaking for the summer.

Recent polls have shown broad discontent with the Republican-led House and Senate. Democrats, hoping to win control of Congress, have tried to portray an out-of-touch Republican Party that has agreed to nearly $35,000 in pay raises for members of Congress over the past decade while refusing to increase the pay for low-wage jobs.

White House spokesman Tony Snow, asked about President George W. Bush's position on the minimum wage, told reporters on Friday, "We are for minimum wage increases if they do not jeopardize the ability of small businesses to create jobs."

"Our policy is clear; if America wants to have a hostile policy toward us, we will stop exporting oil to that country," he said in remarks translated into Persian.

"If Iran were under attack, it would definitely act just like us," he added.

Venezuelan President Hugo Chavez accuses Washington of backing a failed coup against him in 2002. The U.S. denies the charge.

Chavez says any attempt by the U.S. to invade the Caribbean country or assassinate him would result in the suspension of oil sales to the U.S.

A beaming Ahmadinejad presented Chavez with the golden "High Medallion of the Islamic Republic of Iran" and slipped a blue sash around his chest.

"Mr Chavez is my brother, the brother of the whole Iranian nation and of all freedom-seeking people in the world," he said.

"He is a perpetual warrior against the dominant system, a worshipper of God and a servant of the people," he added.

Chavez and Ahmadinejad are both ex-military populists who take a hawkish price stance in the OPEC oil cartel. They enjoy a close personal rapport.

Both countries frequently boast they are steeled for any military assault the United States may launch.

Venezuelan Energy and Mines Minister Rafael Ramirez echoed the leaders' defiant attitude by threatening to cut oil exports to the United States if Washington did not drop its hostile stance toward Chavez's administration.

MORE THAN RHETORIC

But there was more than Yankee-bashing to the visit, and the Venezuelan delegation signed several Memorandums of Understanding on joint work in the oil industry and housing.

Iran and Venezuela also signed deals on jointly making bicycles, medicines and industrial moulds, and pledged to cooperate in aviation and on environmental issues, though details on all these contracts were hazy.

Iranian Oil Minister Kazem Vaziri-Hamaneh said the Iranian firm Petropars would invest $4 billion in two Venezuelan energy projects.

Petropars is already certifying some tarry crude in the Orinoco Belt and is looking to develop reserves there. It also wants to supply training and services to the Norte de Paria offshore gas field.

A planned deal for Venezuela to export gasoline to Iran was canceled. Industry Minister Alireza Tahmasbi told Reuters this was because of problems over pricing and quality.

The contract had attracted considerable interest because of confusion over whether Iran is going to cut gasoline imports from September 23.

Iranian investors have already poured $1 billion of investment into Venezuela, mainly in sectors such as energy, construction and tractor-building.

Carmaker Iran Khodro said it would start making its Samand model in Venezuela in October.

Although commercial deals are proceeding, some analysts have said that Chavez's dependence on the United States as a major buyer of his oil will probably prevent him from striking any arms deals with Tehran.

Chavez visited Moscow before Iran, and on Thursday Russia said it had sold Venezuela 77 aircraft and helicopters as part of a long-term package of arms deals worth over $3 billion.

In Hanoi, the first Venezuelan president to visit Vietnam recalled that both nations had fought anti-imperialist struggles -- Venezuela's fight against the Spanish and Vietnam's battles against the French and the Americans.

"Although this is my first trip to Vietnam, we feel the similarities between our two countries like fish coming back to the water," Chavez said after being welcomed by President Nguyen Minh Triet.

"Vietnam has been very courageous to defeat colonialism and imperialism, not just on the battlefield but also by keeping the flag flying in the field of ideology," he said standing under a bust of revolutionary leader Ho Chi Minh.

"Since I was a child, and also as a soldier, I have admired the courage of the Vietnamese soldiers," said Chavez.

Ministers of the two countries, which have only set up embassies in Hanoi and Caracas over the past year, signed a diplomatic framework pact and agreements on culture and energy cooperation.

Chavez, whose country is one of the world's largest oil producers, said Venezuela could in future help Vietnam turn its vast offshore oil and gas reserves into refined petroleum products.

"President Nguyen Minh Triet told me that Vietnam did not produce oil, but only crude oil... and imports oil products," said Chavez.

The Venezuelan leader said Vietnam was losing 20 dollars each time it failed to refine a barrel of crude oil, making for an annual loss of about two billion dollars.

"Therefore, Vietnam really needs its own oil refinery... and Vietnam has to do something with its gas and exploit and use that gas instead of oil and then export it if it has a market."

The two countries pledged to cooperate and exchange technological know-how but officials released no further details. Last month, a delegation from state-owned PetroVietnam visited Venezuela.

Chavez portrayed the developing ties as part of a wider struggle to liberate developing nations, which he said must "create an alliance of power to ensure freedom."

"We must have freedom and independence so that colonialism cannot step on us," he said. "I think in this area, Vietnam is a huge mirror for the world."

Triet praised Chavez as "a dynamic person" and said "he talks and acts at the same time, so here we would like to promise that we'll also talk and act so that our cooperation will be truly effective."

The Venezuelan leader also met Vietnam's Prime Minister Nguyen Tan Dung and party chief Nong Duc Manh.

While both countries have a history of revolution, Vietnam's leaders were careful not to openly bash the United States at a time when they are eager to build up diplomatic and economic ties with the one-time enemy.

Earlier this year, Vietnam and the United States signed a trade deal that removed a major hurdle in Vietnam's bid to join the World Trade Organisation.

US President George W. Bush is expected to visit Hanoi in November, when Vietnam hosts an Asia Pacific Economic Cooperation summit.